Honda Motor Cuts FY View On JPY 2.50 Tln Losses Amid EV Strategy Reassessment; Stock Drops

Add as your preferred news source on Google Add Now Japanese automajor Honda Motor Co., Ltd. (HMC,7267.T) on Thursday revised downward its forecast for the fiscal year ending March 31, now expecting a loss, compared to previous view of profit, citing up to 2.50 trillion yen losses associated with the reassessment of automobile electrification strategy. However, the company maintained its sales revenue view for the year.In the U.S., Honda Motor shares are currently trading around 5.8 percent lower at $25.95.In Japan, the shares had closed Thursday's regular trading at 1,448.50 yen, down 1.23%.Honda said it has been promoting EV adoption, but the profitability of its Automobile business has been declining primarily due to the impact on the ICE and HEV business caused by the U. S. government policy shift including the imposition of import tariffs, and a decline in the competitiveness of Honda products in Asia.As part of its strategic reassessment in response to the slowdown of the EV market in North America, the company has decided to cancel the market launches and development of certain EV models that were previously planned for production in North America.The company expects the total of expenses and losses related to the reassessment of automobile electrification strategy, including the expected losses for the fiscal year ending March 31, 2026, will be up to 2.50 trillion yen.Honda expects to record an operating costs and expenses of 820.0 billion yen to 1.12 trillion yen, as well as share of loss of investments accounted for using the equity method of 110.0 billion yen to 150.0 billion yen.Moreover, the company expects to record extraordinary losses between 340.0 billion yen and 570.0 billion yen in the non-consolidated financial statements.With the expected losses, for fiscal year ending March 31, the company now expects loss attributable to owners of the parent of 420 billion yen to 690 billion yen, and loss per share of 105.07 yen to 172.62 yen.Operating loss is now expected to be 270 billion yen to 570 billion yen.The company previously expected attributable profit of 300 billion yen or 75.05 yen per share and operating profit of 550 billion yen for the full year.Sales revenues are still expected to be 21.10 trillion yen, down 2.7 percent from last year.In the prior year, the company had recorded attributable profit of 835.84 billion yen or 178.93 yen per share and operating profit of 1.21 billion yen, on sales revenues of 21.69 trillion yen.Futher, in light of the revised forecast and the expected losses, certain executive officers have decided to forfeiture 20% to 30% of their compensation for the fiscal year ending March 31, 2027. For comments and feedback contact: editorial@rttnews.comBusiness News