Honda Motors Q3 2018 Earnings Preview

by Trefis Team
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Honda Motors (NYSE:HMC) will announce its Q3 2018 earnings on February 2nd 2018 and we expect the decline in operating profit to continue in this quarter, based on the company’s guidance. However, its performance in Q2 2018 was better than expected and the company now expects operating profits to be higher than the earlier guidance issued (which expected a 16% decline in operating profits in FY 2018). We will be keenly watching if these cost savings continue in Q3 2018 and the guidance for the next fiscal year.

In November 2017, Honda Motors registered a 5% increase in worldwide production, primarily due to high production in North America, Asia, and China. Production in Japan continues to decline and new vehicles registrations in the country recorded a nearly 2% year on year decline in November 2017. However, sales of mini-vehicles in Japan registered a nearly 12% year on year increase in November 2017, leading to a 4.5% increase in the overall sales of the Honda brand in Japan.

We expect the motorcycles segment to remain a strong performer in Q3 2018 on the back of strong sales in India, Indonesia, and Vietnam.

The below charts summarize our revenue gross margin expectations from Honda Motors’ key segments for the calendar years 2017 and 2018. You can click here to access our interactive model and modify these assumptions:

As Honda reports its Q3 2018 results at the end of this week, we will be keenly watching the operating margin number and the future guidance of the company for FY 2019.

 

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