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MARKETS LIVE BLOG:

STOCKS SHED GAINS, TESLA SURGES DAY AFTER EARNINGS

Tesla shares jump after EV maker vows to speed up launch of more affordable models

Honda (HMC) Q1 Earnings Miss, Sales Beat, Buyback Announced

Zacks Equity Research
·4 min read

Honda HMC reported earnings of 67 per share for first-quarter fiscal 2023, lagging the Zacks Consensus Estimate of 79 cents. The bottom line also fell from the year-ago profit of $1.18 per share. Quarterly revenues totaled $29,560 million, topping the Zacks Consensus Estimate of $27,905 million. The top line, however, contracted 9.7% year on year.

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

Honda Motor Co., Ltd. Price, Consensus and EPS Surprise
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 Jun 30, 2022, revenues from the Automobile segment increased 3.4% year over year to ¥2.32 trillion ($17.97 billion) thanks to favorable currency translations. The segment registered an operating profit of ¥38.2 billion ($295 million), plummeting 45.9% on a year-over-year basis.

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Revenues from the Motorcycle segment came in at ¥676 billion ($5.21 billion), up 30.5% year over year amid an increase in sales in Asia and positive currency effects. The unit’s operating profit came in at ¥97.8 billion ($755 million), rising 21.2% year over year.

Revenues from the Financial Services segment totaled ¥750 billion ($5.79 billion), down 2.2% year on year. The unit’s operating profit, however, decreased 14.5% year over year to ¥78.8 billion ($608.34 million).

Revenues from the Power Product and Other Businesses came in at ¥119 billion ($918.6 million), up 19.9% year over year. The segment incurred an operating income of ¥7.3 billion ($56.54 million) against a loss of ¥391 million incurred in the corresponding quarter of fiscal 2022.

Financials & FY23 View

Consolidated cash and cash equivalents were ¥3.63 trillion ($27.22 billion) as of Jun 30, 2022. Long-term debt was ¥5.01 trillion ($37.62 billion).

For fiscal 2023, Honda forecasts sales of ¥16.75 trillion, implying a 15% uptick year over year. Honda projects sales volumes from Motorcycle and Automobile segments at 18.56 million units and 4.2 million units in fiscal 2023, up around 9% and 5%, respectively. Operating profit is envisioned at ¥830 billion, signaling a drop of 4.7% from fiscal 2022. Pretax profit is forecast at ¥1,040 billion, indicating a year-over-year decline of 2.8%.

The company’s R&D expenses for fiscal 2023 are likely to be ¥850 billion, suggesting a rise from ¥804 billion spent in fiscal 2022. Capex is envisioned at ¥510 billion, indicating a jump from ¥278.4 recorded in fiscal 2022.

For fiscal 2023, Honda expects a total annual dividend of ¥120 per share, including an interim and year-end dividend of ¥60 each. In a bid to enhance its capital structure, the company has decided to buy back shares up to 100 billion yen during the Aug 12, 2022 -Mar 31, 2023 time period.

Honda currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways From Toyota’s Q1 Results

Honda’s closest peer Toyota TM posted fiscal first-quarter fiscal 2023 earnings of $4.14 per share, which surpassed the Zacks Consensus Estimate of $3.77 on higher-than-expected revenues. The bottom line, however, declined from the year-ago earnings of $5.87 a share. Consolidated revenues came in at $65,543 million, beating the consensus mark of $63,653 million but contracting 9.5% year over year.TM exited the quarter with cash and cash equivalents of ¥6.68 trillion ($49.24 billion). As of Jun 30, the firm’s long-term debt amounted to ¥16.88 trillion ($124.34 billion).

For fiscal 2023, Toyota projects consolidated vehicle sales of 8.85 million, indicating an increase from 8.23 million units sold in fiscal 2022. Fiscal 2023 sales are expected to total ¥34.5 trillion, implying an increase from ¥31.4 trillion recorded in fiscal 2022 and higher than the prior view of ¥33 trillion. Operating income is projected at ¥2.4 trillion, indicating a decline of 19.8% year over year.


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