Honda Profit Falls 39% on EV Charges, but the Full-Year Outlook Rises

Honda Motor's operating profit fell 39% to ¥118 billion in the July-September quarter, missing forecasts.

Honda Motor Co. released the results on Tuesday, November 10, 2026, in Tokyo. They cover the quarter ended September 30, 2026.

Honda is Japan's second-largest automaker. Its fiscal year ends March 31, 2027, making this its second quarter.

Operating profit fell 39% and missed the forecast

Operating profit fell 39% from a year earlier, to ¥118 billion. Operating profit is the profit from core operations, before interest and taxes.

The result missed the median forecast of ¥250 billion in a poll of nine analysts by LSEG. Revenue rose 12.9% in the quarter, to ¥5.98 trillion.

Profit attributable to owners of the parent was about ¥65.8 billion in the quarter.

A ¥484.8 billion EV bill sat inside the quarter

Honda booked ¥484.8 billion in costs tied to restructuring its electric-vehicle business in the quarter. That is about $3 billion at the rate Reuters stated.

Excluding those costs, operating profit would have been ¥602.8 billion, a TickerGrove calculation. The charge therefore explains the miss on its own.

Reuters linked part of the shortfall to high parts and material costs stemming from the Iran war. Slumping sales in China also weighed, Reuters reported.

Honda held its full-year estimate for EV restructuring costs at ¥520 billion. The ¥484.8 billion booked in the quarter sits inside that total.

Chief Financial Officer Masao Kawaguchi said Honda had made progress settling the costs with suppliers. "We want to settle everything, as much as possible, within this financial year," he said.

The new charge follows more than $9 billion of EV charges in the previous financial year. Those charges pushed Honda into its first annual loss in nearly 70 years, Reuters reported.

The full-year outlook rose on hybrids and the yen

Honda raised its full-year operating profit forecast by 20%, to ¥780 billion from ¥650 billion. The drivers were robust demand for hybrid vehicles in the United States and a weaker yen.

Those forces are expected to offset slumping sales in China, Reuters reported. Honda also raised its full-year net profit forecast to ¥500 billion, from ¥400 billion.

The full-year revenue forecast rose to ¥24.4 trillion, from ¥24.15 trillion. All three are forecasts for the year ending March 2027, not reported results.

Car sales plans fell while motorcycle plans rose

Honda cut its full-year global vehicle sales forecast by 7%, to 3.16 million. The previous forecast was 3.39 million, and the cut reflects falling sales in China.

The full-year motorcycle sales forecast rose instead, to 23.3 million units from 22.8 million. Dow Jones linked first-half revenue growth to motorcycle sales in India and Brazil.

In the quarter, United States sales rose 9% and accounted for half of global retail sales. Global retail sales were 823,000 vehicles, Reuters reported.

Monday's $3 billion Ohio hybrid plant announcement is context for that bet. It is not part of the quarterly results.

The six-month figures carry a different scope

For the six months ended September 30, revenue was ¥12.038 trillion, up 13.2%. Net profit attributable to owners rose 65.7% over the six months, to ¥516.76 billion.

Six-month operating profit was ¥648.7 billion, and earnings were ¥132.75 a share. Those are six-month figures, not quarterly results, and they never blend with the quarter above.

What remains unknown

What remains unknown starts with the market verdict: the results landed after Tokyo's Tuesday close. No settled share-price reaction exists yet.

How much of the remaining EV estimate books in the second half is unstated. The ¥520 billion full-year estimate leaves about ¥35 billion still to come, a TickerGrove calculation.

Whether China sales stabilize is unstated in the accounts this desk read. Honda expected slightly tougher North American conditions in the second half, Reuters reported.

The third-quarter report tests the raised guide

What to watch: the third-quarter report. It will show whether EV costs are closing out inside this financial year, as the finance chief intends.

China sales and United States hybrid demand are the other tests. Together they decide whether the raised ¥780 billion guide holds.