Honda Motor reported a steep fall in operating profit for its third quarter, with the automaker saying operating profit declined 61.4% from the same period a year earlier. The company recorded operating profit of 153.4 billion yen for the quarter, down from 397.3 billion yen in the comparable quarter a year prior.
The quarterly result came in below the average analyst projection of 174.5 billion yen from nine analysts polled by LSEG. Honda said U.S. import tariffs and weakening demand for electric vehicles contributed to the weaker performance.
This quarter marks the fourth consecutive year-on-year decline in quarterly operating profit for the company. Despite the drop, Honda left its operating profit forecast for the fiscal year ending March 2026 unchanged at 550 billion yen.
Honda also disclosed that its automobile business recorded an operating loss for the first nine months of the financial year, underscoring strain within the company’s core vehicle operations.
The company’s update included the exchange rate used in the report: $1 = 155.4100 yen.
Context and implications
Honda’s third-quarter performance reflects a combination of policy and demand-side pressures identified by management. The company explicitly cited U.S. import tariffs as a headwind and pointed to softer uptake of electric vehicles as another factor weighing on results. These pressures have coincided with a sustained run of year-on-year quarterly profit declines.
Management chose not to revise the full-year operating profit target, maintaining the 550 billion yen forecast for the year ending March 2026 even as the automobile division posted a loss over the first nine months.
Financial details
- Third-quarter operating profit: 153.4 billion yen.
- Third-quarter operating profit, one year earlier: 397.3 billion yen.
- Analyst consensus (average of nine LSEG analysts): 174.5 billion yen.
- Full-year operating profit forecast (year ending March 2026): 550 billion yen.
- Automobile business performance: operating loss for the first nine months of the financial year.
- Exchange rate disclosed: $1 = 155.4100 yen.
Takeaway
Honda’s latest quarter highlights material downside in near-term profitability driven by trade policy and demand dynamics in electric vehicles. The company’s decision to keep its full-year operating profit target unchanged suggests management is either confident in subsequent quarters or expects offsetting factors to restore earnings toward the forecast.