Honda Q3 Earnings Surpass Expectations, Revenues Decline Y/Y

Core Insights - Honda reported earnings of $1.31 per share for Q3 fiscal 2025, exceeding the Zacks Consensus Estimate of 94 cents and up from$1.06 per share a year ago [1] - Quarterly revenues reached $36.3 billion, surpassing the Zacks Consensus Estimate of$35.3 billion but down from $36.5 billion year-over-year [1] Segmental Highlights - Automobile segment revenues declined 0.1$24.75 billion), primarily due to a significant drop in sales from Asia, but exceeded projections of ¥3.26 trillion [2] - The Automobile segment's operating profit was ¥144.5 billion ($948.8 million), down 9.2$5.88 billion), beating the estimate of ¥779.7 billion, with operating profit rising 11.2% to ¥175.8 billion ($1.15 billion) [3] - Financial Services segment revenues totaled ¥848.6 billion ($5.57 billion), up 4.7% year-over-year but below the forecast of ¥887.4 billion; operating profit grew 21.3% to ¥82.2 billion ($539.7 million) [4] - Power Product and Other Businesses reported revenues of ¥98 billion ($660 million), a 6.4% increase year-over-year, surpassing the forecast of ¥79.9 billion, but incurred an operating loss of ¥5.3 billion ($34.8 million) [5] Financial Overview - As of December 31, 2024, consolidated cash and cash equivalents were ¥4.96 trillion ($31.5 billion), while long-term debt rose to ¥6.77 trillion ($42.99 billion) from ¥6.06 trillion as of March 31, 2024 [6] - For fiscal 2025, Honda projects consolidated sales volumes of 13.74 million units for Motorcycles, 2.89 million units for Automobiles, and 3.66 million units for Power Products, with expected increases of 12.4% and 1% for Motorcycles and Automobiles, respectively, while Power Products are projected to decline by 4% [7] - Honda forecasts fiscal 2025 revenues of ¥21.6 trillion, indicating a growth of 5.7% year-over-year, with an operating profit of ¥1.42 trillion (up 2.8%) and a pretax profit forecasted at ¥1.47 trillion (down 10.8%) [8] Market Position - Honda currently holds a Zacks Rank 3 (Hold) [9] - Other notable stocks in the auto sector include Geely Automobile Holdings Limited (Zacks Rank 1), Dana Incorporated (Zacks Rank 1), and Garrett Motion Inc. (Zacks Rank 2) [9]