Honda Motor (7267) Q4 2026 earnings summary

Executive summary

• Sales revenue for the year ended March 2026 rose 0.5% year-over-year to JPY 21,796.6 billion, driven by growth in the Motorcycle segment, but offset by declines in Automobile sales and negative FX impacts; significant EV-related losses led to an operating loss of JPY 414.3 billion, with adjusted operating profit (excluding EV losses) at JPY 1,039.3 billion.

• Motorcycle business achieved record-high unit sales and operating profit, especially in Asia and South America.

• Automobile segment struggled due to tariffs, semiconductor shortages, and EV strategy changes, but maintained profitability excluding EV-related losses.

• Major restructuring of the EV strategy included canceling North America-produced EV models, shifting focus to hybrids and regional EVs, and recognizing substantial EV-related impairments.

• The company aims to rebuild its automobile business structure over the next three years, targeting record operating profit by FY March 2029.

Financial highlights

• EV-related losses for FY2026 totaled JPY 1,577.8 billion, including JPY 1,453.6 billion in operating profit and JPY 124.1 billion from equity method investments.

• Net loss attributable to owners was JPY 423.9 billion; adjusted net profit was JPY 795.5 billion.

• Operating cash flow after R&D adjustments was JPY 2,657.9 billion, maintaining strong cash generation.

• Free cash flow (excluding financial services) was JPY 1.58 trillion.

• Net cash balance at March 2026 was JPY 3.3 trillion.

Outlook and guidance

• FY March 2027 forecast: Sales revenue projected at JPY 23,150.0 billion (+6.2% YoY); operating profit expected at JPY 500 billion, with adjusted operating profit (excluding EV losses) targeted at JPY 1 trillion.

• Annual dividend for FY March 2027 to remain at JPY 70 per share, with a DOE target of about 3%.

• Capital expenditures and R&D spending to increase, especially for hybrid and battery production.

• Motorcycle sales are expected to reach a record 22.8 million units.