Honda Motor (HMC 31.75, +0.66) has added 2.1% after reporting above-consensus results and issuing mixed guidance.
The established automaker reported above-consensus second quarter earnings of JPY96.55 per share on a 15.7% year-over-year increase in revenue to JPY3.78 trillion, which was also better than expected.
Honda's revenue growth was driven by increases in all three segments. Motorcycle unit sales grew 15.4% year-over-year to 5,238,000 units while Automobile unit sales increased 6.1% to 1,292,000, and sales of Power Products rose 1.5% to 1,258,000 units. Motorcycle sales growth was realized thanks to strength in India, Indonesia, and Vietnam while Automobile sales were supported by results from China and Japan, which offset a decline in North American sedan sales.
On a consolidated basis, Motorcycle sales grew 13.3% (to 3,446,000), Automobile sales increased 1.9% (to 907,000), and Power Products sales increased 1.5% (to 1,258,000).
Operating margin declined to 4.1% from 7.0% due to a class-action litigation settlement and the effects of pension accounting treatment one year ago. Excluding litigation settlement effects, operating margin checked in at 5.5%.
Looking ahead, the automaker expects that earnings for the full year will hit JPY326.26 per share, which is shy of market expectations. Revenue is expected at JPY15.05 trillion, which is better than expected. Honda increased its forecast for Motorcycle and Automobile sales for the full year. Motorcycle sales are expected to total 19,180,000, which is up 2.2% from the company's previous guidance and would translate to year-over-year unit growth of 8.6%. Automobile sales are expected to total 5,130,000, up 1.0% from the previous forecast and up 2.0% from sales in fiscal 2017.