Honda Motor (7267) Q4 2026 earnings summary

Executive summary

• Sales revenue for the year ended March 31, 2026, rose 0.5% year-over-year to JPY 21,796.6 billion, driven by growth in the Motorcycle segment, despite significant EV-related losses and negative FX impacts.

• Operating profit was a loss of JPY 414.3 billion, but adjusted operating profit excluding EV-related losses was JPY 1,039.3 billion.

• Motorcycle business achieved record unit sales and operating profit, driven by strong sales in Asia and South America, offsetting declines in the automobile segment.

• Automobile business faced headwinds from higher tariffs, semiconductor shortages, and EV strategy changes, but maintained profitability excluding EV-related losses.

• Strategic shift to prioritize hybrid vehicles and flexible resource allocation in response to market and policy uncertainties.

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 profit attributable to owners was a loss of JPY 423.9 billion, down JPY 1,259.7 billion year-over-year; adjusted profit was JPY 795.5 billion.

• Free cash flow (excluding financial services) was JPY 1.58 trillion; net cash balance at year-end was JPY 3.32 trillion.

• Equity ratio (excluding financial services) stood at 55%; overall equity-to-asset ratio was 63%.

• Annual dividend maintained at JPY 70 per share.

Outlook and guidance

• FY ending March 2027 forecasts EV-related losses of JPY 500 billion.

• Sales revenue is forecast to grow 6.2% to JPY 23,150.0 billion; operating profit projected at JPY 500 billion, with adjusted operating profit (excluding EV losses) targeted at JPY 1 trillion.

• Motorcycle unit sales expected to reach 22.8 million; automobile sales to remain stable in Asia and grow in North America.

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

• Dividend per share is forecast to remain stable at JPY 70, with a DOE target of about 3%.