Honda Raises Annual Profit Forecast as First-Quarter Net Income Doubles to $2.9 Billion

Honda Motor Co. raised its full-year profit forecast on Wednesday after first-quarter net income more than doubled, propelled by resilient vehicle sales in the United States and India alongside currency tailwinds from a weak yen.

Net profit for the April-June period reached 456.9 billion yen ($2.9 billion), up from 196.6 billion yen in the same quarter last year. Revenue rose 13.5% to 6.06 trillion yen ($38 billion), driven by strong demand for models including the Accord sedan and Fit subcompact.

Prompted by the strong quarterly results, the Tokyo-based automaker upgraded its full-year profit outlook to 400 billion yen ($2.5 billion), up from a previous projection of 260 billion yen ($1.6 billion). The revised guidance signals a financial turnaround after Honda recorded a net loss of 423.9 billion yen ($2.7 billion) for the fiscal year ended in March, driven by heavy costs associated with scaling back its electric vehicle plans.

Honda shares jumped 3.9% in Tokyo trading following the announcement.

The financial recovery follows a strategic shift away from aggressive EV expansion after consumer adoption lagged initial projections. In the U.S., policy shifts under the Trump administration—including reduced EV buyer incentives, frozen federal funding for charging stations, and a 15% tariff on imported vehicles and auto parts—further constrained margin growth, even as elevated fuel prices connected to the war in Iran supported sales of internal combustion engine vehicles.

Operational results varied across global regions. Honda’s motorcycle business turned in high profits behind strong sales in Brazil and India, while passenger car sales grew in Japan and the U.S. Conversely, the company continued to struggle in China, where domestic competition and changing consumer preferences weighed on market share.

Chief Financial Officer Masao Kawaguchi said adapting the company’s vehicle lineup to the Chinese market would take time as Honda shifts local operations.

“For that, we must fully utilize our resources in that market,” Kawaguchi told reporters, adding that the transition could take one to two years.

Kawaguchi noted that overall quarterly performance benefited significantly from exchange rate movements. A weaker yen boosted the value of foreign sales repatriated to Japan, despite joint market interventions by U.S. and Japanese authorities that briefly strengthened the yen later in the period.

Looking ahead, Japanese automakers are assessing the fallout from a 7.1 magnitude earthquake that struck Kumamoto in southwestern Japan last week, temporarily halting production lines and disrupting component supply chains. Honda is scheduled to enter its planned summer shutdown later this month, with executives anticipating factory operations will stabilize before work resumes.