Key Takeaways From Honda Motors’ Q3 2018 Results

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Honda Motors  ( HMC ) announced its Q3 2018 results (fiscal year Apr -Mar) on February 2 nd 2018 and the company reported a 13% increase in revenues (year on year) and a 37% increase in consolidated operating profit. Despite an increase in selling and general administrative expenses, Honda Motors was able to increase its operating profit significantly due to a positive model mix and an increase in sales volume. Based on these results the company has revised its guidance for the fiscal year 2017-18 upward. The company now expects sales to be higher by 150 billion yen and operating profit to be higher by 30 billion yen.

The below charts summarize Honda Motors’ performance for Q3 2018 and our expectations for calendar year 2017 and 2018:

You can click here to access these charts and modify our forecasts for the calendar years 2017 and 2018.

Going Forward:

  • Honda Motors has seen strong sales in Asia and based on the above results, the company has revised its guidance for fiscal year 2018. The company now expects a nearly 1.5% increase in motorcycle unit sales compared to its previous guidance driven primarily by a projected increase of 230,000 unit sales in Asia. Similarly in the automobiles segment, the company expects a nearly 2% increase in unit sales compared to its previous forecast, driven by a projected increase of 85,000 units in Asia.
  • For the fiscal year 2018, Honda Motors expects a 9% increase in revenues and a nearly 8% decline in operating profit compared to the previous year. Operating margin is expected to be around 5% for this fiscal year.

We will be updating our model based on the above results which can lead to a change in our price estimate for the company.

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