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01/11 11:26
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects a mixed outlook. Positive aspects include strong motorcycle business performance and a slight dividend increase. However, challenges such as operating losses in the automobile segment, significant EV-related losses, and declining sales in key markets like Asia and China temper the positive sentiment. The market's uncertainty regarding tariffs and unclear management responses further contribute to a neutral sentiment. Given these factors, the stock price is likely to remain stable within the next two weeks, resulting in a neutral prediction.
Operating Profit (Q1 FY2026) JPY 244.1 billion, lower by JPY 240.5 billion year-over-year. Reasons: Negative impacts from tariffs (JPY 124.6 billion), EV-related nonrecurring expenses (JPY 113.4 billion), currency effects (JPY 86.1 billion), and increased expenses (JPY 69.4 billion). Positive impacts from sales (JPY 109.1 billion) and pricing revisions (JPY 68.5 billion).
Equity Method Earnings (Q1 FY2026) JPY 4.2 billion, higher by JPY 2.7 billion year-over-year. Reasons: Not explicitly mentioned.
Quarter Profit Attributable to Parent (Q1 FY2026) JPY 196.6 billion, lower by JPY 197.9 billion year-over-year. Reasons: Not explicitly mentioned but likely linked to the same factors affecting operating profit.
Motorcycle Operations Operating Profit (Q1 FY2026) JPY 189 billion, up by JPY 11.3 billion year-over-year. Reasons: Positive sales impact (JPY 41 billion) due to increased sales in South America, pricing revisions (JPY 14.2 billion), and R&D (JPY 1.3 billion). Negative impacts from expenses (JPY 12.7 billion), currency effects (JPY 30.6 billion), and tariffs (JPY 1.8 billion).
Automobile Operations Operating Loss (Q1 FY2026) JPY 29.6 billion loss. Reasons: Positive sales impact (JPY 46.4 billion) due to increased sales in North America and pricing revisions (JPY 53.5 billion). Negative impacts from expenses (JPY 43.1 billion), R&D (JPY 26.4 billion), and currency effects (JPY 47.3 billion).
Free Cash Flow (Q1 FY2026) JPY 294 billion. Reasons: Not explicitly mentioned.
Net Cash Balance (End of Q1 FY2026) JPY 2,907.9 billion. Reasons: Not explicitly mentioned.
Operating Cash Flow After R&D Adjustment (Q1 FY2026) JPY 583 billion. Reasons: Not explicitly mentioned.
EV-related nonrecurring expenses: Provision for losses on EVs currently sold in the U.S. and the impact from write-off of development asset of EV models due to the change in product range.
Motorcycle sales expansion: Sales growth in Brazil and Vietnam, achieving record high operating profit for a quarter period.
Automobile sales in North America: Strong sales performance in North America despite tariff impacts.
Operating profit forecast revision: Revised up to JPY 700 billion for FY ending March 2026, reflecting a JPY 200 billion increase due to tariff impact review and exchange rate changes.
Cost management: Pricing revisions contributed positively to profits, while R&D and tariff impacts negatively affected operating profit.
Share buyback program: Acquisition of shares worth JPY 936.5 billion as part of a JPY 1.1 trillion buyback program resolved in December 2024.
Tariffs: Tariffs have led to a significant profit decline of JPY 124.6 billion in the first quarter and are expected to have a gross negative impact of JPY 450 billion for the fiscal year ending March 2026. This remains a major uncertainty for the company.
EV-related nonrecurring expenses: Nonrecurring expenses related to EVs, including losses on EVs sold in the U.S. and write-offs of development assets due to product range changes, negatively impacted profits by JPY 113.4 billion in the first quarter.
Currency exchange rates: Currency fluctuations, particularly the exchange rate against the U.S. dollar, resulted in a negative impact of JPY 86.1 billion in the first quarter and are expected to negatively impact the fiscal year by JPY 302 billion.
Automobile business performance: The automobile segment reported operating losses of JPY 29.6 billion in the first quarter, driven by declines in sales in China and other Asian regions, as well as increased R&D and other expenses.
R&D expenses: Increased R&D expenses led to a profit decline of JPY 24.5 billion in the first quarter and are expected to negatively impact the fiscal year by JPY 126 billion.
Expenses: General expenses negatively impacted profits by JPY 69.4 billion in the first quarter and are expected to have a negative impact of JPY 91.5 billion for the fiscal year.
Full Year Operating Profit Forecast: Revised up to JPY 700 billion for the fiscal year ending March 2026, reflecting a JPY 200 billion increase from the previous forecast due to changes in exchange rate assumptions and tariff impact review.
Net Profit Forecast: Projected at JPY 420 billion for the fiscal year ending March 2026, up by JPY 170 billion from the previous forecast.
Exchange Rate Assumption: Revised to JPY 140 against the U.S. dollar for the fiscal year ending March 2026.
Dividend Forecast: Full-year dividend forecast remains unchanged at JPY 70 per share for the fiscal year ending March 2026.
Motorcycle Unit Sales Forecast: Expected to remain at 21.3 million units for the fiscal year ending March 2026, with growth in Brazil offsetting declines in Europe.
Automobile Unit Sales Forecast: Maintained at 3.62 million units for the fiscal year ending March 2026.
Power Products Unit Sales Forecast: Maintained at 3.67 million units for the fiscal year ending March 2026.
Capital Expenditures, Depreciation, and R&D: Expected spending for fiscal year ending March 2026 outlined but specific figures not detailed in the transcript.
Forecast for full year dividend: JPY 70 per share, unchanged from the previous published forecast.
Share buyback program: Resolved on December 23, 2024, for JPY 1.1 trillion. As of July 31, 2025, shares worth JPY 936.5 billion have been acquired.
The earnings call reflects a mixed outlook. Positive aspects include strong motorcycle business performance and a slight dividend increase. However, challenges such as operating losses in the automobile segment, significant EV-related losses, and declining sales in key markets like Asia and China temper the positive sentiment. The market's uncertainty regarding tariffs and unclear management responses further contribute to a neutral sentiment. Given these factors, the stock price is likely to remain stable within the next two weeks, resulting in a neutral prediction.
The earnings report indicates significant challenges: a decline in net profit and operating profit due to various factors, including sales decline in China, increased R&D expenses, and foreign exchange impacts. Despite a dividend increase and share buyback, the postponement of electrification strategies and unclear management responses in the Q&A add to the negative sentiment. The market may react negatively to these uncertainties and the lack of strong positive catalysts, leading to a potential stock price decline in the short term.
The earnings call presents a mixed picture. While there are positive aspects like increased motorcycle sales and share repurchase plans, there are significant concerns such as declining automobile sales, increased R&D costs, and currency impacts. The Q&A section reveals some uncertainties, particularly regarding the Chinese market and EV incentives. Despite optimistic guidance on future models and market strategies, the lack of clarity in management's responses tempers enthusiasm. Given these factors, the overall sentiment is neutral, with no strong catalysts to drive significant stock price movement in either direction.
The earnings call summary indicates several negative factors: profit decline from domestic affiliates, negative equity method profit, and reduced unit sales in China. Despite increased operating profit, the overall sentiment is negative due to high warranty costs, forex fluctuations, and unclear management responses. The Q&A section highlights concerns about EV incentives and collaboration with Nissan and Mitsubishi. The dividend and share buyback plans provide some positive sentiment, but the overall impact is likely negative due to significant financial challenges and uncertainties.
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