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Honda (HMC) Q1 Earnings Exceed Estimates but Decline Y/Y

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Honda (HMC - Free Report) reported earnings of $1.57 per share for first-quarter fiscal 2025, surpassing the Zacks Consensus Estimate of $1.19. The bottom line, however, declined from the year-ago profit of $1.60 per share. Quarterly revenues totaled $34.7 billion, surpassing the Zacks Consensus Estimate and the year-ago period figure of $33.7 billion.

Honda Motor Co., Ltd. Price, Consensus and EPS Surprise

Honda Motor Co., Ltd. Price, Consensus and EPS Surprise

Honda Motor Co., Ltd. price-consensus-eps-surprise-chart | Honda Motor Co., Ltd. Quote

Segmental Highlights 

For the three-month period, which ended on Jun 30, 2024, revenues from the Automobile segment increased 14.8% year over year to ¥3.43 trillion ($22.03 billion) and outpaced our projection of ¥2.9 trillion on the back of higher sales from all major end markets except Asia. The segment registered an operating profit of ¥222.8 billion ($1.43 billion), up 26% from the corresponding quarter of fiscal 2024 and breezing past our estimate of ¥139.1 billion.

Revenues from the Motorcycle segment came in at around ¥937.7 billion ($6 billion), which increased 23.8% year over year and beat our estimate of ¥867.3 billion, amid increased sales across all major end markets except Japan. The unit’s operating profit came in at ¥177.6 billion ($1.14 billion), up 24% year over year and higher than our forecast of ¥167.6 billion.

Revenues from the Financial Services segment totaled ¥938.1 billion ($6.02 billion), rising 21.3% year on year and surpassing our prediction of ¥860.7 billion. The unit’s operating profit moved up 22.2% year over year to ¥85 billion ($545.1 million) but missed our estimate of ¥90.5 billion.

Revenues from Power Product and Other Businesses came in at ¥104.9 billion ($673 million), down 4% year over year. However, revenues beat our forecast of ¥96.8 billion. The segment incurred an operating loss of ¥753 million ($4.83 million) versus a profit of ¥4.4 billion generated in the year-ago period. Our forecast was for an operating loss of ¥28 billion. 

Financials & FY25 View

Consolidated cash and cash equivalents were ¥4.98 trillion ($30.93 billion) as of Jun 30, 2024. Long-term debt was around ¥6.16 trillion ($38.3 billion) as of Jun 30, 2024, up from ¥6.06 trillion as of Mar 31, 2024.

Honda projects fiscal 2025 consolidated sales volumes from the Motorcycle, Automobile and Power Products segments to be 13.06 million units, 2.97 million units and 3.66 million units, respectively. The forecast implies growth of 7% and 4% year over year in Motorcycles and Automobiles units, respectively. However, Power Product Unit sales are likely to decline 4% year over year in fiscal 2025.

For fiscal 2025, Honda forecasts revenues of ¥20.3 trillion, implying a decline of 0.6% year over year. Operating profit is envisioned at ¥1.42 trillion, indicating growth of 2.8% year over year. Pretax profit is forecast to be ¥1.48 trillion, suggesting a drop of 9.9% year over year. The company will play an interim and year-end dividend of ¥34/share each in fiscal 2025.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Quarterly Releases of Other Legacy Automakers

General Motors (GM - Free Report) reported second-quarter 2024 results on Jul 23. It posted adjusted earnings of $3.06 per share, which surpassed the Zacks Consensus Estimate of $2.67. The bottom line also increased from the year-ago quarter’s level of $1.91. Solid results from the GMNA segment led to the outperformance. Revenues of $47.97 billion beat the Zacks Consensus Estimate of $44.94 billion and increased from $44.75 billion recorded in the year-ago period. General Motors had cash and cash equivalents of $22.5 billion as of Jun 30, 2024. The long-term automotive debt at the end of the quarter was $15.4 billion.

Ford (F - Free Report) reported second-quarter 2024 results on Jul 24. It posted adjusted earnings per share of 47 cents, which missed the Zacks Consensus Estimate of 64 cents and declined from 72 cents recorded in the year-ago quarter. The company’s consolidated second-quarter revenues came in at $47.8 billion, up 6.3% year over year.Ford had cash and cash equivalents of $19.95 billion as of Jun 30, 2024. Long-term debt, excluding Ford Credit, totaled $18.69 billion at the end of the second quarter of 2024.

Toyota (TM - Free Report) reported first-quarter fiscal 2025 results on Aug 1. It posted earnings of $6.35 per share, which surpassed the Zacks Consensus Estimate of $4.01 but declined from the year-ago earnings of $7.05 a share. Consolidated revenues came in at $75.9 billion, which beat the consensus mark of $72.5 billion but declined from $76.8 billion in the year-ago quarter. Toyota had cash and cash equivalents of ¥7.59 trillion ($47.21 billion) as of Jun 30, 2024. Long-term debt was ¥22.19 trillion ($137.9 billion), up from ¥21.15 trillion as of Mar 31, 2024.

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