Honda Q2 Earnings Miss Expectations, Revenues Decline Y/Y

Honda HMC reported earnings of 60 cents per share for the second quarter of fiscal 2026, missing the Zacks Consensus Estimate of 62 cents. The bottom line, however, rose from the year-ago quarter’s earnings of 43 cents per share. Quarterly revenues totaled $35.9 billion, which lagged the Zacks Consensus Estimate of $37.1 billion and fell from the year-ago period’s figure of $36.2 billion.

Honda Motor Co., Ltd. Price, Consensus and EPS Surprise

Honda Motor Co., Ltd. price-consensus-eps-surprise-chart | Honda Motor Co., Ltd. Quote

Segmental Highlights

For the three-month period, which ended on Sept. 30, 2025, revenues from the Automobile segment decreased 4.6% year over year to ¥3.46 trillion ($23.3 billion). The segment registered an operating loss of ¥43.4 billion ($292.4 million) against an operating income of $35.2 billion in the corresponding quarter of fiscal 2025. 

Revenues from the Motorcycle segment came in at around ¥969 billion ($6.53 billion), which increased 11% year over year. The unit’s operating profit came in at ¥179.3 billion ($1.21 billion), up 21% year over year.

Revenues from the Financial Services segment totaled ¥846.2 billion ($5.7 billion), down 3.3% year over year. The unit’s operating profit totaled ¥58.2 billion ($392 million), down 25% year over year.

Revenues from Power Product and Other Businesses came in at ¥100.3 billion ($675 million), up 2% year over year. The segment’s operating loss narrowed to ¥78 million compared with the operating loss of ¥3.2 billion incurred in the same period last year.

Financials & FY26 View

Consolidated cash and cash equivalents were ¥4.64 trillion ($31.2 billion) as of Sept. 30, 2025. Long-term debt was around ¥8.13 trillion ($54.7 billion) as of Sept. 30, 2025.

Honda projects fiscal 2026 consolidated sales volumes from the Motorcycle, Automobile and Power Products segments to be 14.25 million units, 2.64 million units and 3.67 million units, respectively. The forecast implies growth of 4.1% year over year in the Motorcycles unit. However, Automobile and Power Product Unit sales are likely to decline 7% and 0.8%, respectively, year over year in fiscal 2026.

For fiscal 2026, Honda forecasts revenues of ¥20.7 trillion, implying a decline of 4.6% year over year. Operating profit is envisioned at ¥550 billion, indicating a contraction of 54.7% year over year. Pretax profit is forecasted to be ¥590 billion, suggesting a drop of 55.2% year over year. The muted guidance comes amid macroeconomic and tariff-related challenges. The company will pay an interim and year-end dividend of ¥35/share each in fiscal 2026.

Honda’s Zacks Rank & Key Picks

HMC carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the auto space are General Motors Company GM, OPENLANE, Inc. KAR and Garrett Motion Inc. GTX, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GM’s 2025 and 2026 EPS has improved 70 cents and $1.07, respectively, in the past 30 days.

The Zacks Consensus Estimate for KAR’s 2025 sales and earnings implies year-over-year growth of 9.4% and 48.2%, respectively. EPS estimates for 2025 and 2026 have improved 9 cents and 11 cents, respectively, in the past seven days.

The Zacks Consensus Estimate for GTX’s 2025 sales and earnings implies year-over-year growth of 2.6% and 16.7%, respectively. EPS estimates for 2025 and 2026 have improved 12 cents and 22 cents, respectively, in the past 30 days. 

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This article originally published on Zacks Investment Research (zacks.com).

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