Honda’s profit for the fiscal first quarter more than doubled from a year ago, as the Japanese automaker continues to tackle a turnaround from the first full year loss in its history.
Tokyo-based Honda Motor Co. said Wednesday its April-June profit totaled 456.9 billion yen ($2.9 billion), up from 196.6 billion yen for the same period a year ago.
Quarterly sales rose 13.5% to 6.06 trillion yen ($38 billion), as vehicles sold well in the U.S. and India, according to the maker of the Accord sedan, Fit subcompact and Super Cub motorcycle.
Honda previously recorded a 423.9 billion yen ($2.7 billion) loss for the fiscal year ended in March, acknowledging heavy costs for its electric-vehicle plans, which didn’t measure up to the original ambitions, partly because of U.S. President Donald Trump’s policies.
Analysts say many consumers weren’t ready to go electric. Honda has abandoned many of its plans for EV models.
The Trump administration has pulled back on incentive programs for EVs and withheld money to states wanting to add more EV charging stations, even as gas prices have soared over the war in Iran. Trump’s tariffs on imported autos and auto parts, lowered to 15% from the initial 25%, also worked to dent Honda’s profitability.
For the latest quarter, Honda’s motorcycle operations were highly lucrative with sales going strong in Brazil and India. Car sales grew in Japan and the U.S., while struggling in China.
Chief Financial Officer Masao Kawaguchi said Honda was working to offer the kinds of models that appeal to Chinese buyers, which are different from those in other markets.
“For that, we must fully utilize our resources in that market,” he told reporters.
That may still take another year or two, he added.
Kawaguchi said Honda’s overall first quarter results were very healthy, thanks partly to a favorable exchange rate.
Although the recent U.S.-Japan joint intervention has boosted the yen’s value somewhat, the U.S. dollar traded higher during the fiscal first quarter, compared with the previous year.
A cheap yen is a boon for Japanese exporters like Honda because it raises the value of its overseas earnings when translated into yen.
Honda is expecting a return to profit for this fiscal year and raised its profit forecast to 400 billion yen ($2.5 billion) from an earlier 260 billion yen ($1.6 billion).
All the Japanese automakers have been impacted by last week’s 7.1 magnitude earthquake in Kumamoto in southwestern Japan. Some production lines were temporarily halted and supply chains disrupted.
Like other Japanese companies, Honda is going on a summer break later this month. Officials said they’re hoping things will have returned to normal by the time they’re back at work, and the exact impact of the quake on vehicle production is still unclear.
Honda shares jumped 3.9% in Tokyo trading after the financial results were released.
