Aug 5, 2026 earnings call — Record quarterly profit and forecast revision
Honda reported record first-quarter operating profit of JPY 530.7 billion.
Revenue $38.3B (est $36.2B) · EPS $2.18 (est $1.22)
Key quotes
"Therefore, this time, in our forecast, again, we have maintained the JPY 500 billion that we have originally forecast. And with the foreign exchange impact, it has been revised to JPY 520 billion."
"And this is the reason why we wanted to make this announcement early on, and we were early to extend the contract."
"At Saitama factory, operations will be suspended for a total of 6 days until August 19, including the summer break. And at Suzuka factory, operations will be suspended from August 6 tomorrow to the 19th in total of 5 days, including the summer break."
Analyst Q&A 8
EV losses and China auto sales
Q (Hideyuki Miura · Asahi Shimbun Newspaper): He asked why EV-related losses were not included in Q1 and whether factors other than foreign exchange explain the JPY 520 billion. He also asked about weak China sales and the joint venture extension in July.
A: Management said North American EV strategy changed and supplier compensation is the main cost. Negotiations with suppliers just started, so they could not book the impact in Q1 and kept the JPY 500 billion forecast, revised to JPY 520 billion because of foreign exchange. On China, weak macro and a shift toward NEVs shrank ICE and Hybrid demand; Honda is in a model change and has extended the GAC joint venture to reassure dealers and customers.
"And therefore, in this first quarter, it's not the case that we can include this in our numbers." — Unknown Executive
China plans and Nissan talks
Q: He asked whether China sales will stay low and for progress on restructuring, local suppliers and EV platforms. He also asked for an update on collaboration with Nissan and what it means for Honda.
A: Management said Honda cut capacity and quickly adjusted production in China (ICE capacity reduced from about 1.5 million to 700-plus) and is working with local suppliers and partners to commonize parts and improve products; EV platform talks with the partner are ongoing and success may take about a year. On Nissan, they said prior integration talks ended but they still plan collaboration on electrification, SDV, batteries and platforms to take advantage of combined volume, though no specific details yet.
"In each of those areas, we would like to work together with Nissan so that we can take advantage of the volume we have from each other." — Unknown Executive
Q1 profit and Kumamoto quake impact
Q (Rina Ukita · Yomiuri Shimbun Newspaper): She asked for management's view on the record first-quarter profit and drivers (FX, unit sales) and what would happen if Kumamoto plant suspensions last longer.
A: Management said operating profit was an all-time high at JPY 530 billion and that a weaker yen, raw material cost moves, and stronger unit sales (motorcycles and North America) helped. For Kumamoto, the motorcycle plant was soaked by sprinklers but shows no major equipment damage and is restarting with safety checks; suppliers to auto plants are affected and Honda will gather information up to the 19th before deciding on production resumptions.
"So JPY 530 billion, this is a very powerful number, operating profit." — Unknown Executive
Which parts affected by the quake
Q (Kosuke Shimizu): He asked which parts and how many suppliers were affected, and about timing compared with other automakers restarting.
A: Management said they are still checking suppliers and parts but that dampers are one major affected item. They said an Astemo group plant near the epicenter suffered bigger damage and information is still incomplete, so Honda paused production until recovery and will provide updates when available.
"Damper is one of those major products affected at the moment." — Unknown Executive
North America incentives and Japan sales
Q: He asked if rising incentives in North America offset product mix gains and what is driving domestic sales growth; he also asked the expected sales impact from the earthquake.
A: Management said higher gasoline prices are pushing customers to buy hybrids, and incentives increased from the fourth quarter of last fiscal year because of tougher competition and upcoming model changes; they aim to reduce incentives and July trends look positive. In Japan, registered-car sales are up and models like Super-ONE EV (with Boost mode and partial subsidy) helped growth. On the earthquake impact, they said they do not yet know the unit-sales effect but do not expect a large impact.
"But from the fourth quarter of last fiscal year, we have increased incentives because of the competition with the competitors." — Masao Kawaguchi (CFO)
Motorcycle outlook and EV loss timing
Q: He asked whether motorcycle sales plans are unchanged by capacity limits, and when EV-related losses will be recognized after supplier talks.
A: Management said motorcycle Q1 results were better than plan and they have no major concerns now, though they will monitor risks like Vietnamese regulation; overall sales plans remain. On EV losses, they said negotiations with suppliers started in April and are ongoing, so Q1 did not include those charges; they will book losses stepwise as they gain confidence, across the first and second half.
"And we are still in the middle of the negotiations with them." — Sumihiro Takahashi
Quake sourcing and currency effects
Q (NHK): He asked if Honda will seek alternative parts sourcing after the quake and how currency moves affect results.
A: Management said they will suspend automotive production at least until the 19th and cannot yet say if alternative sourcing is needed; they are closely communicating with suppliers and will decide when they have more information. On currency, they estimate sensitivity is between JPY 10 billion to JPY 12 billion per yen and said weaker yen helps some areas but hurts others (for example, U.S.-dollar supplier payments), so effects vary by region.
"And taking all these things into consideration, we think the sensitivity is between JPY 10 billion to JPY 12 billion per yen." — Unknown Executive
Semiconductor supply and cost risks
Q (Nikkei Automotive): He asked if rising memory demand and AI will cause supply or price risks for semiconductors and how Honda will respond.
A: Management said car demand for memories is rising and memory suppliers are trying to balance supply, with improvements likely after 2027. Honda is securing legacy memory through initiatives and long-term agreements where possible, and they already factored an additional JPY 20 billion, JPY 30 billion semiconductor cost increase into the year's forecast.
"However, the cost is soaring, getting more expensive then because of the supply-demand situation, the memory prices are going up." — Unknown Executive