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Honda (HMC) Incurs Q4 Loss Amid Coronavirus-Led Low Sales
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Honda Motor (HMC - Free Report) incurred fiscal fourth-quarter 2020 loss of 16 cents per ADR against the Zacks Consensus Estimate of earnings of 28 cents. The reported figure also widened from the year-ago quarter’s loss of 7 cents per share. Factory shutdowns, depressed demand for vehicles and weak consumer sentiment led to the underperformance. The firm’s revenues declined 13.6% year over year to $31,752 million, which surpassed the Zacks Consensus Estimate of $31,727 million.
Honda Motor Co Ltd Price, Consensus and EPS Surprise
For the three months ended Mar 31, 2020, revenues from the Automobile segment declined 19.7% year over year to ¥2.3 trillion ($21.4 billion) amid lower sales in India, the United States and China. Consequently, the unit’s operating loss widened from the corresponding period of 2019 to ¥75.7 billion ($694 million). Lower sales and negative foreign currency translations more than offset the benefits of cost-cut initiatives.
Revenues from the Motorcycle segment came in at ¥473.5 billion ($4.3 billion), down 3.2% year over year amid lower unit sales in India, Indonesia and Thailand. However, the unit’s operating profit increased 41.2% from the comparable year-ago period to ¥63.5 billion ($582 million) due to cost reduction.
Revenues from the Financial Services segment totaled ¥628.4 billion ($5.7 billion), up 0.9% year over year. The unit’s operating profit decreased 61.2% year over year to ¥22.9 billion ($210 million).
Revenues from Life Creation and Other Business came in at ¥97.2 billion (892.4 million), down 5.6% year over year. The segment incurred operating loss of ¥16.3 billion ($150 million), which widened from the loss of ¥8.7 billion in the corresponding period of the prior year amid weaker sales of products in North America, Europe and Asia.
Dividend & Financial Position
The company announced a quarterly dividend of ¥28 per share for shareholders. Total annual dividend per share to be paid for fiscal 2020 will be ¥112. Amid coronavirus-induced uncertainty and financial crisis, Honda refrained from providing any dividend forecast and financial outlook for fiscal 2021.
Consolidated cash and cash equivalents were ¥2.67 trillion ($24.8 billion) as of Mar 31, 2020. Long-term debt was ¥4.22 trillion ($39.2 billion). The long-term debt was 33.7% of the total capital.
Zacks Rank & Stocks to Consider
Honda currently carries a Zacks Rank #5 (Strong Sell).
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Honda (HMC) Incurs Q4 Loss Amid Coronavirus-Led Low Sales
Honda Motor (HMC - Free Report) incurred fiscal fourth-quarter 2020 loss of 16 cents per ADR against the Zacks Consensus Estimate of earnings of 28 cents. The reported figure also widened from the year-ago quarter’s loss of 7 cents per share. Factory shutdowns, depressed demand for vehicles and weak consumer sentiment led to the underperformance. The firm’s revenues declined 13.6% year over year to $31,752 million, which surpassed the Zacks Consensus Estimate of $31,727 million.
Honda Motor Co Ltd Price, Consensus and EPS Surprise
Honda Motor Co Ltd price-consensus-eps-surprise-chart | Honda Motor Co Ltd Quote
Segmental Highlights
For the three months ended Mar 31, 2020, revenues from the Automobile segment declined 19.7% year over year to ¥2.3 trillion ($21.4 billion) amid lower sales in India, the United States and China. Consequently, the unit’s operating loss widened from the corresponding period of 2019 to ¥75.7 billion ($694 million). Lower sales and negative foreign currency translations more than offset the benefits of cost-cut initiatives.
Revenues from the Motorcycle segment came in at ¥473.5 billion ($4.3 billion), down 3.2% year over year amid lower unit sales in India, Indonesia and Thailand. However, the unit’s operating profit increased 41.2% from the comparable year-ago period to ¥63.5 billion ($582 million) due to cost reduction.
Revenues from the Financial Services segment totaled ¥628.4 billion ($5.7 billion), up 0.9% year over year. The unit’s operating profit decreased 61.2% year over year to ¥22.9 billion ($210 million).
Revenues from Life Creation and Other Business came in at ¥97.2 billion (892.4 million), down 5.6% year over year. The segment incurred operating loss of ¥16.3 billion ($150 million), which widened from the loss of ¥8.7 billion in the corresponding period of the prior year amid weaker sales of products in North America, Europe and Asia.
Dividend & Financial Position
The company announced a quarterly dividend of ¥28 per share for shareholders. Total annual dividend per share to be paid for fiscal 2020 will be ¥112. Amid coronavirus-induced uncertainty and financial crisis, Honda refrained from providing any dividend forecast and financial outlook for fiscal 2021.
Consolidated cash and cash equivalents were ¥2.67 trillion ($24.8 billion) as of Mar 31, 2020. Long-term debt was ¥4.22 trillion ($39.2 billion). The long-term debt was 33.7% of the total capital.
Zacks Rank & Stocks to Consider
Honda currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the same sector are Veoneer, Inc. , Unique Fabricating, Inc. and Modine Manufacturing Company (MOD - Free Report) , each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>