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, slightly down year-on-year.

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

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

• Total assets increased to JPY 30,775.9 billion, while equity decreased to JPY 12,627.8 billion due to treasury stock purchases and dividends.

• Announced a new dividend policy based on DOE to ensure stable returns, with a forecasted dividend of JPY 70 per share for FYE March 2026.

Financial highlights

• Sales revenue increased 6.2% year-on-year to JPY 21,688.8 billion; operating profit decreased 12.2% to JPY 1,213.4 billion.

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

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

• Net cash from operating activities dropped to JPY 292.2 billion from JPY 747.3 billion; investing outflows increased to JPY 941.9 billion.

• Dividend per share for FY2025 was JPY 68.00, with a payout ratio of 38.0%.

Outlook and guidance

• FYE March 2026 guidance: sales revenue JPY 20,300.0 billion (-6.4%), operating profit JPY 500 billion (-58.8%), net profit JPY 250 billion (-70.1%), and EPS JPY 62.84, with significant tariff and forex headwinds.

• Motorcycle sales expected to rise to 21.3 million units; automobile sales to decrease to 3.62 million units, mainly due to Asia.

• Tariff impact estimated at JPY 650 billion, with ongoing efforts to mitigate through cost reduction, production reallocation, and potential capacity increases in the U.S.

• Forecast assumes average USD/JPY rate of 135.