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Honda Motor Co., Ltd. (HMC - Free Report) reported consolidated income of ¥95.9 billion ($841.2 million) or ¥53.24 per share (47 cents per ADR) in the fourth quarter (ended Mar 31, 2017) of fiscal 2017. Earnings per share surpassed the Zacks Consensus Estimate of 21 cents. Consolidated loss in the year-ago quarter was ¥93.4 billion ($812.2 million), while the loss per share was ¥51.85 (46 cents per ADR).
Consolidated net sales and other operating revenues rose 2.9% year over year to ¥3.76 trillion ($32.98 billion). The figure surpassed the Zacks Consensus Estimate of $31.19 billion. The year-over-year rise can be attributed to higher revenues in financial services and automobile business operations.
Consolidated operating profit amounted to ¥138.1 billion ($1.21 billion) against a loss of ¥63.8 billion ($554.8 million) in the prior-year quarter. The improvement was backed by cost-reduction efforts and a decrease in selling, general and administrative (SG&A) expenses, including quality-related expenses. These factors offset the unfavorable currency effects and higher research and development expenses.
Full Year 2017
Hondareported consolidated income of ¥616.5 billion ($5.71 billion) or ¥342.10 per share ($3.17 cents per ADR) in fiscal 2017. Earnings per share surpassed the Zacks Consensus Estimate of $2.88. Consolidated income rose 79% year over year, while the earnings per share were 150.94% higher.
Consolidated net sales and other operating revenues fell 4.1% year over year to ¥14 trillion ($129.6 billion). The year-over-year decline can be attributed to unfavorable currency translation, more than offsetting a rise in sales across all business operations. However, the figure surpassed the Zacks Consensus Estimate of $126.88 billion.
Honda Motor Company, Ltd. Price, Consensus and EPS Surprise
Revenues in the Automobile segment inched up 0.9% to ¥2.75 trillion ($24.12 billion) despite unfavorable foreign currency translation effects. Unit sales decreased 2% from the year-ago period to 960,000 vehicles. Meanwhile, operating profit amounted to ¥54.9 billion ($481.6 million), against a loss in the prior-year quarter, on cost-reduction efforts and lower SG&A expenses.
Revenues in the Motorcycle segment increased 3.8% to ¥453.7 billion ($3.98 billion), on a 2.1% increase in consolidated unit sales to 2.69 million motorcycles and favorable foreign currency translation effects. Operating income surged 38.1% to ¥31.8 billion ($278.9 million), owing to benefits of cost-reduction efforts, which offset the unfavorable foreign currency translation effects.
Revenues in the Financial Services segment improved 13.3% to ¥521.1 billion ($4.57 billion). Moreover, operating income rose 9.6% to ¥47.7 billion ($418.4 million) on higher operating lease revenues, which more than offset higher SG&A expenses.
Revenues in the Power Product and Other segment rose 22.6% to ¥114.8 billion ($1 billion) in the reported quarter. The rise resulted from higher consolidated unit sales, which offset unfavorable foreign currency translation effects. Unit sales in the segment improved 13.5% to 2.22 million. The segment's operating loss was ¥2.7 billion ($23.7 million), narrower than a loss of ¥20.2 billion ($175.7 million) in the year-ago quarter due to lower expenses in other businesses operations.
Financial Position
Consolidated cash and cash equivalents amounted to ¥2 trillion ($17.54 billion) as of Mar 31, 2017, up from ¥1.67 trillion ($14.52 billion) as of Mar 31, 2016.
In fiscal 2017, cash flow from operations declined 36.3% to ¥885.1 billion ($8.2 billion).
Guidance
For fiscal 2018, Honda expects revenues to improve 1.4% to ¥14.2 trillion ($135.24 billion). Operating income is likely to decline 16.1% to ¥705 billion ($6.71 billion). Net income is projected to decline 14% to ¥530 billion ($5.05 billion) or ¥294.07 ($2.83) per share, down 48% year over year.
Price Performance
The performance of Honda’s shares was stronger than the Zacks categorized Automotive-Foreign industry over the last three months. The stock’s price decreased 3.1%, while the industry recorded decline of 3.4%.
Fiat Chrysler has an expected long-term growth rate of 21.7%.
Gentex has an expected growth rate of around 10.4% over the long term.
Lear has an expected long-term growth rate of 8.9%.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>
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Honda (HMC) Q4 Earnings Beat Estimates, FY18 Guidance Soft
Honda Motor Co., Ltd. (HMC - Free Report) reported consolidated income of ¥95.9 billion ($841.2 million) or ¥53.24 per share (47 cents per ADR) in the fourth quarter (ended Mar 31, 2017) of fiscal 2017. Earnings per share surpassed the Zacks Consensus Estimate of 21 cents. Consolidated loss in the year-ago quarter was ¥93.4 billion ($812.2 million), while the loss per share was ¥51.85 (46 cents per ADR).
Consolidated net sales and other operating revenues rose 2.9% year over year to ¥3.76 trillion ($32.98 billion). The figure surpassed the Zacks Consensus Estimate of $31.19 billion. The year-over-year rise can be attributed to higher revenues in financial services and automobile business operations.
Consolidated operating profit amounted to ¥138.1 billion ($1.21 billion) against a loss of ¥63.8 billion ($554.8 million) in the prior-year quarter. The improvement was backed by cost-reduction efforts and a decrease in selling, general and administrative (SG&A) expenses, including quality-related expenses. These factors offset the unfavorable currency effects and higher research and development expenses.
Full Year 2017
Honda reported consolidated income of ¥616.5 billion ($5.71 billion) or ¥342.10 per share ($3.17 cents per ADR) in fiscal 2017. Earnings per share surpassed the Zacks Consensus Estimate of $2.88. Consolidated income rose 79% year over year, while the earnings per share were 150.94% higher.
Consolidated net sales and other operating revenues fell 4.1% year over year to ¥14 trillion ($129.6 billion). The year-over-year decline can be attributed to unfavorable currency translation, more than offsetting a rise in sales across all business operations. However, the figure surpassed the Zacks Consensus Estimate of $126.88 billion.
Honda Motor Company, Ltd. Price, Consensus and EPS Surprise
Honda Motor Company, Ltd. Price, Consensus and EPS Surprise | Honda Motor Company, Ltd. Quote
Segment Performance
Revenues in the Automobile segment inched up 0.9% to ¥2.75 trillion ($24.12 billion) despite unfavorable foreign currency translation effects. Unit sales decreased 2% from the year-ago period to 960,000 vehicles. Meanwhile, operating profit amounted to ¥54.9 billion ($481.6 million), against a loss in the prior-year quarter, on cost-reduction efforts and lower SG&A expenses.
Revenues in the Motorcycle segment increased 3.8% to ¥453.7 billion ($3.98 billion), on a 2.1% increase in consolidated unit sales to 2.69 million motorcycles and favorable foreign currency translation effects. Operating income surged 38.1% to ¥31.8 billion ($278.9 million), owing to benefits of cost-reduction efforts, which offset the unfavorable foreign currency translation effects.
Revenues in the Financial Services segment improved 13.3% to ¥521.1 billion ($4.57 billion). Moreover, operating income rose 9.6% to ¥47.7 billion ($418.4 million) on higher operating lease revenues, which more than offset higher SG&A expenses.
Revenues in the Power Product and Other segment rose 22.6% to ¥114.8 billion ($1 billion) in the reported quarter. The rise resulted from higher consolidated unit sales, which offset unfavorable foreign currency translation effects. Unit sales in the segment improved 13.5% to 2.22 million. The segment's operating loss was ¥2.7 billion ($23.7 million), narrower than a loss of ¥20.2 billion ($175.7 million) in the year-ago quarter due to lower expenses in other businesses operations.
Financial Position
Consolidated cash and cash equivalents amounted to ¥2 trillion ($17.54 billion) as of Mar 31, 2017, up from ¥1.67 trillion ($14.52 billion) as of Mar 31, 2016.
In fiscal 2017, cash flow from operations declined 36.3% to ¥885.1 billion ($8.2 billion).
Guidance
For fiscal 2018, Honda expects revenues to improve 1.4% to ¥14.2 trillion ($135.24 billion). Operating income is likely to decline 16.1% to ¥705 billion ($6.71 billion). Net income is projected to decline 14% to ¥530 billion ($5.05 billion) or ¥294.07 ($2.83) per share, down 48% year over year.
Price Performance
The performance of Honda’s shares was stronger than the Zacks categorized Automotive-Foreign industry over the last three months. The stock’s price decreased 3.1%, while the industry recorded decline of 3.4%.
Zacks Rank & Key Picks
Currently, Honda has a Zacks Rank #4 (Sell).
Some better-ranked companies in the auto space include Fiat Chrysler Automobiles N.V. , Gentex Corporation (GNTX - Free Report) and Lear Corporation (LEA - Free Report) . All stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fiat Chrysler has an expected long-term growth rate of 21.7%.
Gentex has an expected growth rate of around 10.4% over the long term.
Lear has an expected long-term growth rate of 8.9%.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>