Core Viewpoint - Honda reported a 42% drop in profit for the nine months through December, primarily due to U.S. tariffs impacting earnings, marking the second consecutive year of profit decline during this period [1] Financial Performance - Honda's profit for the three quarters totaled 465.4 billion yen ($3 billion), down from 805.2 billion yen [1] - Sales for the same period decreased by 2.2% to 15.98 trillion yen ($102.6 billion) compared to the previous year [1] - The company maintained its full fiscal year profit forecast at 300 billion yen ($1.9 billion) [1] Market Dynamics - The slowdown in electric vehicle (EV) sales in the U.S. market was identified as a negative factor for Honda [1] - Honda reduced its global EV sales ratio projection for 2030 to 20% from a previous target of 30% and canceled the development of certain EV models due to market changes [1] Tariff Impact - U.S. tariffs on automobiles and auto parts were reduced from 25% to 15% by the Trump administration, which has favored the oil and gas industry [1] - Tariffs have significantly affected Japan's export-reliant economy, including its automakers [1] Industry Context - Toyota Motor Corp., another major Japanese automaker, also reported a decline in profit recently [1] - Japan's new Prime Minister Sanae Takaichi, who recently won a parliamentary election, is expected to promote policies aimed at boosting growth through increased government spending, particularly in technology and defense [1] Stock Market Reaction - Honda's stock rose by 2.1% in trading following the profit report [1] - The Nikkei 225 benchmark index increased by 2.3%, reaching a record high for the second consecutive day, partly due to Takaichi's popularity [1]