Honda Motor Co., Ltd. (TSE: 7267) reported consolidated full-year results for the fiscal year ended March 31, 2026 (FY3/2026) under IFRS. Revenue edged up 0.5% year-on-year to ¥21,796,610 million, lifted by motorcycle-business growth despite auto-business declines and adverse FX translation. But operating profit swung from +¥1,213,486 million in FY25 to a -¥414,346 million loss — a ¥1,627.8 billion year-on-year deterioration. Pre-tax profit fell from +¥1,317,640 million to -¥403,300 million (a ¥1,720.9 billion swing), and net profit attributable to owners of the parent swung from +¥835,837 million to -¥423,941 million — a ¥1,259.8 billion year-on-year deterioration. Basic EPS was -¥106.06 versus +¥178.93. Equity-method investment income/(loss) was -¥162,080 million versus +¥982 million prior year.
EV-related losses dominate the year
Honda's own disclosure attributes the operating-profit collapse principally to EV-related losses, with US-tariff headwinds and price-cost pressure as additional contributors. The company's FY27 walk reveals the magnitude of the FY26 EV charges and the expected FY27 step-down. EV-related losses were also concentrated in equity-method investments, partially explaining the -¥162 billion equity-method line. Honda has been restructuring its EV product roadmap and capacity plans through FY26 against a slowing EV demand environment in key markets.
Balance sheet expands; equity ratio drops to 35.3%
Total assets grew to ¥33,509,285 million from ¥30,775,867 million (+¥2,733 billion), reflecting operating-lease asset growth (Honda's finance-services arm) and FX translation. Total liabilities rose ¥3,213 billion to ¥21,361 billion as financing-related debt grew. Total equity attributable to owners fell from ¥12,326,529 million to ¥11,817,512 million due to the loss and treasury-share buybacks, partially offset by FX translation. The equity ratio dropped to 35.3% from 40.1%. Despite the loss, operating cash flow strengthened dramatically to ¥1,135,261 million (vs ¥292,152 million) on working-capital improvements (lower parts/raw-material payments) and stronger financial-services receivable collections.
293 million treasury shares cancelled; dividend held at ¥70
Honda cancelled an extraordinary ~293 million treasury shares during FY26 (issued shares dropped from 5,280,000,000 to 4,533,000,000 — a 14% reduction in issued count, partially from cancellations and partially from issued-share adjustments). The FY3/2026 annual dividend was held at ¥70 per share (¥35 interim + ¥35 year-end), up ¥2 from FY25's ¥68 — a notable shareholder-return decision given the loss year, signaling management's confidence in the FY27 recovery. The FY3/2027 dividend is guided at the same ¥70 annual (¥35 + ¥35).
FY27 guidance: return to ¥500bn OP, ¥260bn net profit
Full-year FY3/2027 guidance — based on a FX assumption of ¥145/USD — calls for a substantial recovery: revenue of ¥23,150,000 million (+6.2%), operating profit of ¥500,000 million (returning to profit), pre-tax profit of ¥500,000 million, net profit of ¥335,000 million, and net profit attributable to owners of ¥260,000 million with EPS of ¥66.79. The FY26→FY27 operating-profit walk shows volume effects (+¥266.7bn), price/cost (-¥313.0bn), FX (-¥142.0bn) and a US-tariff drag, partially offset by the unwinding of the heavy FY26 EV-related losses. Management retains its smaller, ongoing FY27 EV-related-loss provision but assumes the bulk of the FY26 one-time impairments do not recur.
| Metric | FY3/2026 | FY3/2025 | YoY |
|---|---|---|---|
| Revenue (¥ billion) | 21,796.6 | 21,688.8 | +0.5% |
| Operating profit (¥ billion) | -414.3 | 1,213.5 | Swung to loss |
| Pre-tax profit (¥ billion) | -403.3 | 1,317.6 | Swung to loss |
| Net profit attrib. to owners (¥ billion) | -423.9 | 835.8 | Swung to loss |
| Basic EPS (¥) | -106.06 | 178.93 | Swung negative |
| Operating margin | -1.9% | 5.6% | -7.5pp |
| Equity-method investment income/(loss) (¥ billion) | -162.1 | +1.0 | Swung negative |
| Total assets (¥ billion) | 33,509.3 | 30,775.9 | +8.9% |
| Equity ratio | 35.3% | 40.1% | -4.8pp |
| Operating cash flow (¥ billion) | 1,135.3 | 292.2 | +288.6% |
| Annual dividend (¥) | 70.00 | 68.00 | +2.9% |
| FY27 operating profit guidance (¥ billion) | 500.0 | — | Return to profit |
| FY27 net profit attrib. guidance (¥ billion) | 260.0 | — | Return to profit |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.