Honda Motor (7267) Q4 2025 earnings summary

Executive summary

• Operating profit for FYE March 2025 was JPY 1,213.4 billion, impacted by a one-time warranty provision change; excluding this, operating profit was JPY 1,341 billion.

• Motorcycle business achieved record highs in unit sales, operating profit, and margins, while automobile sales declined, especially in China and ASEAN, partially offset by HEV growth and higher EV incentives in North America.

• Sales revenue rose 6.2% year-over-year to JPY 21,688.8 billion, driven by strong motorcycle business and positive FX effects.

• Dividend policy changed to DOE, with annual dividend increased to JPY 70 per share for FY2026.

• Significant impact from new tariffs and foreign exchange volatility is expected for FYE March 2026, with minimum operating profit guidance set at JPY 500 billion and net profit at JPY 250 billion.

Financial highlights

• Net profit attributable to owners for FYE March 2025 was JPY 835.8 billion, down 24.5% year-over-year.

• Operating margin declined from 6.8% to 5.6% year-over-year.

• Free cash flow (excluding financial services) was JPY 665.8 billion; net cash balance at period end was JPY 3.2 trillion.

• Operating cash flow after R&D adjustments remained strong at JPY 2,800 billion.

• EPS dropped to JPY 178.93.

Outlook and guidance

• FYE March 2026 guidance: sales revenue JPY 20,300.0 billion, operating profit minimum JPY 500 billion, net profit minimum JPY 250 billion, and EPS JPY 62.84.

• Motorcycle sales expected to rise to 21.3 million units; automobile sales to decrease to 3.62 million units, with focus on strengthening HEV sales in North America.

• Tariff and forex impacts are expected to reduce profit by JPY 452–650 billion; mitigation efforts projected at JPY 200 billion.

• Electrification strategy and large-scale investments in Canada postponed due to slower-than-expected EV market growth.

• Forecast assumes average USD/JPY rate of 135.