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Honda (HMC) Reports Y/Y Improvement in Q2 Profit & Revenues

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Honda Motor Co., Ltd. (HMC - Free Report) reported consolidated profit of ¥210.7 billion in the second quarter of fiscal 2019, up 21.2% from the year-ago period.

Revenues increased 1.7% year over year to ¥3.8 trillion. The year-over-year increase can be attributed to higher sales revenue at motorcycle and financial services businesses.

Honda reported consolidated operating profit of ¥214.4 billion in the second quarter of fiscal 2019, up 40.2% from the year-ago period. This improvement can be attributable to rise in profit related to changes in sales volume and model mix, and the reverse effect from loss due to the settlement of multi-district class action litigation.

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

 

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

Segmental Performance

For the three months ended on Sep 30, 2018, revenues from the Automobile segment’s sales decreased 0.9% to ¥2.62 trillion. During the reported quarter, unit sales decreased 3.6% year over year to 1.25 million. The Motorcycle segment increased 5.7% to ¥539.3 billion and unit sales increased 1.5% on a year-over-year basis to 5.32 million.

In the quarter ended on Sep 30, 2018, the Financial Services segment increased 11.4% to ¥5996.1 billion. The Power Product & Other segment was down 1.6% to ¥81.7 billion and unit sales increased 0.3% on a year-over-year basis to 1.26 million vehicles.

Financial Position

Consolidated cash and cash equivalents were ¥2.25 trillion as of Sep 30, 2018, down from ¥2.26 trillion as of Mar 31, 2018.

Guidance

For fiscal 2019 (ending on Mar 31, 2019), Honda expects revenues to be up 2.9% to ¥15.8 trillion. Operating income is likely to decrease by 5.2% to ¥790 billion.

Zacks Rank & Key Picks

Honda currently has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are Allison Transmission Holdings, Inc. (ALSN - Free Report) , Advance Auto Parts, Inc. (AAP - Free Report) and AutoZone, Inc. (AZO - Free Report) . While Allison Transmission sports a Zacks Rank #1 (Strong Buy), both Advance Auto Parts and AutoZone carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 10%. Over the past six months, shares of the company have surged 12.7%.

Advance Auto Parts has an expected long-term growth rate of 12.3%. Over the past six months, shares of the company have risen 43.8%.

AutoZone has an expected long-term growth rate of 12.2%. Over the past six months, shares of the company have risen 19.1%.

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