Honda Reports Decline in Quarterly Earnings
(MENAFN) Honda Motor experienced a steep 49.6% decline in its quarterly earnings compared to the same timeframe last year, spanning April to June, as ongoing US import duties continue to affect Japanese carmakers.
The company’s operating income dropped sharply to 244.17 billion yen (equivalent to $1.65 billion) in the initial quarter, down from 484.7 billion yen recorded during the identical period the prior year.
According to the financial disclosures published on Wednesday, Honda’s overall income reached 5.34 trillion yen, a slight decline from 5.4 trillion yen.
The released results fell short of forecasts for the quarter.
"Operating profit decreased by 49.6%, to JPY 244.1 billion from the same period last year, due mainly to tariff impacts as well as negative foreign currency effects, which were partially offset by increased profit attributable to sales impacts," Honda explained in a statement.
Nonetheless, the automaker noted that the adverse consequences of the vehicle tariffs would be less significant than previously assumed.
In its outlook, the company projected continued currency depreciation, which led it to revise its full-year operating income forecast upward from 500 billion yen to 700 billion yen — an enhancement of 200 billion yen, or 40%.
While the Trump administration has recently eased reciprocal tariffs on Japanese imports to 15%, the exact timing of when this revised rate will come into force remains uncertain.
Japan, in return, has committed to increasing its financial input into the United States as part of a $550 billion economic initiative included in a bilateral trade arrangement.
Under the terms, the US has agreed to lower the duty on imported Japanese vehicles from 27.5% to 15%.
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