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Honda (HMC) Drives Past Q1 Earnings and Revenue Estimates

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Honda Motor Co., Ltd. (HMC - Free Report) reported consolidated income of ¥207.3 billion ($1.85 billion) or ¥115.04 per share ($1.03 per ADR) in the first quarter of fiscal 2017 (ended Jun 30). Earnings per share surpassed the Zacks Consensus Estimate of 83 cents. Earnings per share rose ¥18.11 (16 cents per ADR) from the year-ago quarter figure.

Consolidated sales revenues increased 7% year over year to ¥3.71 trillion ($33.15 billion). The figure surpassed the Zacks Consensus Estimate of $31.30 billion. The year-over-year increase can be attributed to higher revenues in financial services, motorcycle business operations and foreign currency conversion effects.

Consolidated operating profit amounted to ¥269.2 billion ($2.40 billion), reflecting an increase of 0.9% from that of prior-year quarter. The improvement was backed by a rise in sale volume and model mix, and continuous lowering down of costs. These factors were offset by higher selling, general and administrative (SG&A) expenses.

Segment Performance

Sales revenues in the Automobile segment inched up 3.5% to ¥2.62 trillion ($23.38 billion). Unit sales increased 4.5% from the year-ago period to 1.27 million vehicles.

Revenues in the Motorcycle segment increased 17.6% to ¥508.5 billion ($4.54 billion), on an 8% increase in consolidated unit sales, to 4.69 million motorcycles.

Revenues in the Financial Services segment improved 15.3% to ¥539.6 billion ($4.82 billion).

Revenues in the Power Product and Other segment rose 2.7% to ¥83.1 billion ($0.74 billion) in the reported quarter.

Financial Position

Consolidated cash and cash equivalents were ¥2 trillion ($18.03 billion) as of Jun 30, 2017, increasing ¥86.5 trillion ($0.77 billion) sequentially.


For fiscal 2018 (ending Mar 31, 2018), Honda expects revenues to improve 3.6% to ¥14.5 trillion ($129.4 billion). Operating income is likely to decline 13.8% to ¥725 billion ($6.47 billion). Profit before income taxes is projected to decline 10.6% to ¥900 billion ($8.03 billion).

Zacks Rank & Key Picks

Currently, Honda has a Zacks Rank #3 (Hold).

Some better-ranked companies in the auto space are Allison Transmission Holdings (ALSN - Free Report) , Volkswagen AG (VLKAY - Free Report) and Daimler AG (DDAIF - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has expected long-term growth rate of 11%.

Volkswagen has expected growth rate of around 17.3% in the long run.

Daimler has expected long-term growth rate of 2.8%.

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

Honda Motor Company, Ltd. Price, Consensus and EPS Surprise | Honda Motor Company, Ltd. Quote

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