Honda Motor Co. Ltd. reported a massive uptick in operating profit for its fiscal first quarter. The company saw it jump 78% as sales in the U.S. rose 45% during the period.
The Japanese automaker’s Q1 2024 revenue came in at 4.6 trillion yen, or about $32 billion, which was a 20.8% jump compared to the year-ago period which was 3.8 trillion yen. While its operating profit rose to 394.4 billion yen, or $2.7 billion its net income more than doubled to 363 billion yen, or about $2. 5 billion. The result was an operating margin of 8.5%.
The automaker’s global sales rose 11% to 901,000 vehicles during Q1. More than a third of that was in the U.S., which saw sales jump 45% to about 347,000 vehicles, the automaker said. China sales fell 5% to about 309,000 vehicles and Europe slid 13% to about 20,000 units.
U.S. sales making strides
Masaharu Hirose, general manager of Honda’s finance department, attributed the leap in U.S. sales to an improved manufacturing environment, particularly the availability of semiconductors. The biggest drivers of U.S. sales were the Honda Accord and Pilot.
Through the first half of 2023, Honda’s North America production rose 27% to 767,121 vehicles. In China, however, production felt 12% to 617,638 vehicles. The company’s sales fell too as Honda is lagging the push to build EVs in China.
When looking at just the automotive business in North America, the company enjoyed a 54.4% jump in sales, rising to 1.96 million vehicles for the quarter compared with just 1.27 million during the year-ago period.
Sales in its home market were also up, but not nearly as robustly, as the company saw a 6.3% jump on a year-over-year basis. Conversely, its business in the rest of Asia was down 7.1% for the first quarter.
Outlook stays the same
Like many of its competitors, Honda kept its earnings outlook unchanged for the current fiscal year, which ends March 31, 2024. The company predicted operating profit will grow 28%to 1 trillion yen, or $6.9 billion, while net income is forecast to rise 23% to 800 billion yen ($5.5 billion).
Worldwide sales are expected to grow 18% to 4.35 million vehicles in the current fiscal year, with North America leading the way with a 38% increase to 1.65 million vehicles.
