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Earnings: Honda Motor begins fiscal 2020 on a dull note, sells fewer cars in North America

Japanese automobile manufacturer Honda Motor Co (NYSE: HMC) said its revenues for the first three months of fiscal 2020 edged down 0.7% to JPY 3,996.2 billion (approx. $37.4 billion).

During the quarter, the company witnessed disappointing performance across all business units, except in Financial services. The top-line was also hurt by forex headwinds, the company said.

honda motor stock - a logo of honda on a vehicle
Photo by Hadi Yazdi on Unsplash

The Motorcycle and Life Creation units (Power Product business has been renamed Life Creation business from April 1, 2019) declined 8.1% and 4.5% respectively, partially offset by a marginal 1.2% increase in the Automobile segment.  

Automobile sales were mainly pulled down by the weakness in North America, where it sold 23% fewer cars compared to last year. The big fall in the Motorcycle division was led by weakness in the Indian market.

Despite its cost optimization initiatives, operating profit fell 15.7% to JPY 252.4 billion (approx. $2.36 billion) due to SG&A expenses and lower revenues.

On a per-share basis, the Civic-maker reported earnings of JPY 97.92 (approx. $0.92) in the first quarter.

READ: What Tesla executives discussed during Q2 2019 earnings call

HMC shares ended their last trading session down 0.24%. The stock has declined 6% so far this year.

Outlook

For the fiscal full year, the company expects a 1.5% decrease in sales revenue to JPY 15,650 ($146.4 billion), while EPS is projected to be JPY366.57 (3.43).

Operating profit for this period is forecast to increase 6%.

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