Honda Motor Co., Ltd. (HMC - Free Report) reported consolidated income of ¥174 billion ($1.54 billion) or ¥96.6 per share (86 cents per ADR) in the second quarter of fiscal 2018 (ended Sep 30, 2017). Earnings per share surpassed the Zacks Consensus Estimate of 49 cents.
Consolidated sales revenues increased 15.7% year over year to ¥3.78 trillion ($33.5 billion). The figure surpassed the Zacks Consensus Estimate of $31.4 billion. The year-over-year increase can be attributed to higher revenues in all business operations and positive foreign currency conversion effects.
Consolidated operating profit came in at ¥152.9 billion ($1.36 billion), reflecting a decrease of 32.9% from that of prior-year quarter. The decline was due to the loss pertaining to the settlement of litigation and the reverse impact of pension plan amendment. These factors were offset by lower selling, general and administrative (SG&A) expenses, and a rise in sales volumes and model mix.
Segment Performance
For the six months ended Sep 30, 2017, sales revenues in the Automobile segment increased 8.2% to ¥5.24 trillion ($46.5 billion). In the first six months of fiscal year 2018, unit sales increased 5.3% from the year-ago period to 2.56 million vehicles.
For the six months ended Sep 30, 2017, revenues in the Motorcycle segment rose 21% to ¥1.02 trillion ($9 billion), on an 11.8% increase in unit sales to 9.94 million.
For the six months ended Sep 30, 2017, revenues in the Financial Services segment improved 18.1% to ¥1.07 trillion ($9.5 billion).
For the six months ended Sep 30, 2017, revenues in the Power Product and Other segment rose 5.9% to ¥160.7 billion ($1.43 billion) in the reported quarter.
Financial Position
Consolidated cash and cash equivalents were ¥2.21 trillion ($19.6 billion) as of Sep 30, 2017, increasing ¥2.11 trillion ($18.7 billion) as of Mar 31, 2017.
Guidance
For fiscal 2018 (ending Mar 31, 2018), Honda expects revenues to improve 7.5% to ¥15.1 trillion ($133.9 billion). Operating income is likely to decline 11.4% to ¥745 billion ($6.61 billion). Profit before income taxes is projected to decline 5.2% to ¥955 billion ($8.47 billion).
Zacks Rank & Key Picks
Currently, Honda has a Zacks Rank #4 (Sell).
A few better-ranked companies in the auto space are Daimler AG , BorgWarner Inc. (BWA - Free Report) and Ford Motor Company (F - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Daimler has an expected long-term growth rate of 2.8%.
BorgWarner has an expected long-term growth rate of 9%.
Ford has an expected long-term growth rate of 12.3%.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Honda Motor Co., Ltd. (HMC - Free Report) reported consolidated income of ¥174 billion ($1.54 billion) or ¥96.6 per share (86 cents per ADR) in the second quarter of fiscal 2018 (ended Sep 30, 2017). Earnings per share surpassed the Zacks Consensus Estimate of 49 cents.
Consolidated sales revenues increased 15.7% year over year to ¥3.78 trillion ($33.5 billion). The figure surpassed the Zacks Consensus Estimate of $31.4 billion. The year-over-year increase can be attributed to higher revenues in all business operations and positive foreign currency conversion effects.
Consolidated operating profit came in at ¥152.9 billion ($1.36 billion), reflecting a decrease of 32.9% from that of prior-year quarter. The decline was due to the loss pertaining to the settlement of litigation and the reverse impact of pension plan amendment. These factors were offset by lower selling, general and administrative (SG&A) expenses, and a rise in sales volumes and model mix.
Segment Performance
For the six months ended Sep 30, 2017, sales revenues in the Automobile segment increased 8.2% to ¥5.24 trillion ($46.5 billion). In the first six months of fiscal year 2018, unit sales increased 5.3% from the year-ago period to 2.56 million vehicles.
For the six months ended Sep 30, 2017, revenues in the Motorcycle segment rose 21% to ¥1.02 trillion ($9 billion), on an 11.8% increase in unit sales to 9.94 million.
For the six months ended Sep 30, 2017, revenues in the Financial Services segment improved 18.1% to ¥1.07 trillion ($9.5 billion).
For the six months ended Sep 30, 2017, revenues in the Power Product and Other segment rose 5.9% to ¥160.7 billion ($1.43 billion) in the reported quarter.
Financial Position
Consolidated cash and cash equivalents were ¥2.21 trillion ($19.6 billion) as of Sep 30, 2017, increasing ¥2.11 trillion ($18.7 billion) as of Mar 31, 2017.
Guidance
For fiscal 2018 (ending Mar 31, 2018), Honda expects revenues to improve 7.5% to ¥15.1 trillion ($133.9 billion). Operating income is likely to decline 11.4% to ¥745 billion ($6.61 billion). Profit before income taxes is projected to decline 5.2% to ¥955 billion ($8.47 billion).
Zacks Rank & Key Picks
Currently, Honda has a Zacks Rank #4 (Sell).
A few better-ranked companies in the auto space are Daimler AG , BorgWarner Inc. (BWA - Free Report) and Ford Motor Company (F - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Daimler has an expected long-term growth rate of 2.8%.
BorgWarner has an expected long-term growth rate of 9%.
Ford has an expected long-term growth rate of 12.3%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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