Honda Motor Co., Ltd. (HMC:NYSE) announced its consolidated financial results for the fiscal year ended March 31, 2025

Rhea-AI Summary

Honda Motor (HMC) reported its FY2025 financial results with an operating profit of 1,213.4 billion yen (1,341.0 billion yen excluding warranty model changes). The motorcycle division achieved record-high sales volume, operating profit, and operating margin. While auto sales declined in China and ASEAN regions, HEV (Hybrid Electric Vehicle) sales expanded in North America. For FY2026, Honda forecasts operating profit of 500.0 billion yen and net profit of 250.0 billion yen. The company targets motorcycle sales exceeding 21.3 million units. Honda also announced a new dividend policy based on DOE (Dividend on Equity) ratio, with FY2026 dividend expected at 70 yen per share, up 2 yen from previous year.

Positive

• Record-high performance in motorcycle business (sales volume, operating profit, and margins)
• Strong HEV (Hybrid) sales expansion in North America
• Operating cash flows after R&D adjustment reached 2,806.6 billion yen
• Dividend increase to 70 yen per share (+2 yen YoY)
• New DOE-based dividend policy for improved capital efficiency and stability

Negative

• Significant decline in FY2026 profit forecast (500.0B yen vs 1,213.4B yen)
• Decreased auto sales in China and ASEAN markets
• Higher EV incentive costs in North America impacting margins
• Uncertain tariff impact outlook on vehicles and parts
• Challenging sales environment expected in China for FY2026

Insights

Financial Analyst

Honda reports strong FY2025 with ¥1,213.4B operating profit; projects significant 59% profit decline for FY2026 amid tariff challenges.

Honda Motor Co. has released its fiscal year 2025 results showing an operating profit of ¥1,213.4 billion (¥1,341.0 billion excluding warranty estimation model changes). The company delivered impressive cash generation with operating cash flows after R&D reaching ¥2,806.6 billion.

The motorcycle division was the star performer, achieving record highs across three key metrics: sales volume, operating profit, and operating margin. This exceptional motorcycle performance helped offset challenges in the automobile segment, which faced decreased sales in China and ASEAN markets alongside higher EV incentive costs in North America. Despite these headwinds, Honda's hybrid electric vehicle (HEV) sales showed strong expansion.

The outlook for fiscal year 2026 signals significant concerns. Honda projects operating profit to decline dramatically to ¥500.0 billion - a 59% decrease from FY2025. Profit for the year is forecast at ¥250.0 billion. This substantial projected decline appears to be influenced by uncertain tariff impacts, although the company notes it has implemented measures to offset additional tariffs on vehicles and parts.

For the motorcycle business, Honda maintains an optimistic sales target exceeding 21.3 million units for FY2026, aiming to surpass the strong FY2025 performance. The automobile division faces a more challenging environment, particularly in China, but Honda plans to strengthen its HEV sales, especially in North America.

In a positive move for shareholders, Honda is transitioning its dividend policy to a DOE (Dividend on Equity) model to improve capital efficiency and ensure stable dividends during uncertain periods. The company expects to increase its dividend to ¥70 per share for FY2026, up ¥2 from the previous fiscal year.

TOKYO, May 13, 2025 /PRNewswire/ -- Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal year ended March 31, 2025.

Financial Results for FYE March 31, 2025

• Operating Profit 1,213.4 bil. Yen (excl. the impact of the change in the estimation model for automobile product warranties: 1,341.0 bil. yen）
• In motorcycle business, we achieved record-high sales volume, operating profit, and operating margin.
• In automobile business, despite decreased sales, mainly in China and ASEAN, and higher EV incentives in North America, HEV sales expanded.
• Operating cash flows after R&D adjustment 2,806.6 bil. Yen

Financial Forecast for FYE March 31, 2026 

• Operating Profit 500.0 bil. Yen / Profit for the year 250.0 bil. Yen
• Tariff Impact: Uncertain outlook, but measures to offset additional tariffs on completed vehicles and parts have been reflected.
• In motorcycle business, sales plan targets more than 21.3 million unit sales, surpassing sales of FYE March 31, 2025.
• In automobiles business, despite challenging sales environment, especially in China, strengthen HEV sales, particularly in North America.

Shareholder Returns

• We changed the dividend policy to improve capital efficiency and ensure stable dividends even during periods of uncertainty, DOE will be adopted. Dividend Outlook FYE March 31, 2026: Expected to be 70 yen per share (an increase of 2 yen vs. previous FY)

Honda's financial results can be accessed from following web site address.
https://global.honda/en/investors/library/documents.html

 

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SOURCE Honda Motor Co., Ltd.

FAQ

What is Honda's (HMC) operating profit forecast for fiscal year 2026?

Honda forecasts an operating profit of 500.0 billion yen for fiscal year 2026, with net profit expected at 250.0 billion yen.

How did Honda's (HMC) motorcycle business perform in fiscal year 2025?

Honda's motorcycle business achieved record-high performance across three metrics: sales volume, operating profit, and operating margin.

What is Honda's new dividend policy and expected dividend for FY2026?

Honda adopted a new dividend policy based on DOE (Dividend on Equity) ratio for improved capital efficiency. The FY2026 dividend is expected to be 70 yen per share, an increase of 2 yen from the previous year.

What were the main challenges in Honda's (HMC) automobile business in FY2025?

Honda faced decreased auto sales in China and ASEAN markets, along with higher EV incentive costs in North America, though this was partially offset by expanded HEV sales.

What is Honda's motorcycle sales target for FY2026?

Honda targets motorcycle sales exceeding 21.3 million units for FY2026, aiming to surpass FY2025 sales figures.