Key Facts
• August 6, 2025: Honda announced a revised net profit forecast for FY2026.
• New forecast: ¥420 billion net profit, a 49.8% year-on-year decrease.
• Previous forecast (May 2025): ¥250 billion; revised upward by ¥170 billion.
• Reason: U.S.-Japan agreement to reduce auto tariffs from 27.5% to 15%.
• Tariff-related operating profit reduction revised from ¥650 billion to ¥450 billion.
• Revenue forecast: ¥21.1 trillion, down 2.7% year-on-year, but ¥800 billion higher than prior estimate.
• Operating profit forecast: ¥700 billion, down 42.3% year-on-year, but ¥200 billion higher than prior estimate.
• Currency exchange rate adjustments also contributed ¥150 billion to operating profit.
Summary
Honda has revised its FY2026 net profit forecast upward by ¥170 billion, now projecting ¥420 billion, despite a 49.8% year-on-year decline. This adjustment follows a U.S.-Japan agreement to lower auto tariffs from 27.5% to 15%, reducing the negative impact on operating profit from ¥650 billion to ¥450 billion. Revenue is expected to reach ¥21.1 trillion, a 2.7% year-on-year decrease but ¥800 billion higher than earlier estimates. Operating profit is forecasted at ¥700 billion, down 42.3% year-on-year but ¥200 billion above prior projections. Currency exchange rate adjustments also contributed ¥150 billion to operating profit. These developments highlight the significant impact of tariff reductions and currency adjustments on Honda’s financial outlook.
