Honda says its revenue tanked 47% in the fiscal first quarter
- Honda says its revenue tanked 47% in the fiscal first quarter.
- The Japanese automaker reports £580 million of net loss.
- Its car business records £1.41 billion of operating loss in Q1.
Honda Motor Co. (TYO: 7267) said on Wednesday that it concluded its fiscal first quarter with a net loss due to the Coronavirus pandemic that pushed its production facilities into temporarily shutting down in recent months and weighed on demand across the globe. Honda recalled 85,000 vehicles last month in Indonesia over faulty fuel pumps.
Shares of the company jumped just under 4% on Wednesday. At £20.35 per share, Honda is currently about 5% down year to date in the stock market after recovering from an even lower £15.37 per share in the first week of April. Learn more about how do people make money on the stock market.
Honda reports £580 million of net loss in fiscal Q1
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At £580 million, the Japanese carmaker said its net loss in the first quarter came in significantly weaker than £1.24 billion of profit in the same quarter last year. According to FactSet, experts had forecast the company to see a much lower £460 million of loss in Q1. Honda announced its monthly
In terms of revenue, the automaker announced a massive 47% decline in the quarter that concluded in June to £15 billion. Honda announced to have bought a 1% stake in China’s EV battery manufacturer CATL.
In its report on Wednesday, Honda also highlighted that its pre-tax profit in the first quarter likely took a £3.17 billion hit due to the Coronavirus pandemic that has so far infected more than 18 million people worldwide and caused over 0.7 million deaths. For the full financial year, it forecasts a £4.79 billion hit to its pre-tax profit due to COVID-19.
Honda’s car business records £1.41 billion of operating loss
As per the multinational conglomerate, its car business recorded £1.41 billion of operating loss in the recent quarter versus £870 million of profit in the comparable quarter of last year. Its motorcycle business, on the other hand, registered a massive 84% decline in operating profit to £81 million.
According to Honda, its performance in the home market and North America was noted the worst in the first quarter.
For the full year, the car manufacturer forecasts a 14% decline in revenue to £92 billion and a 64% decline in net profit to £1.19 billion.
At the time of writing, the Japanese multinational conglomerate that primarily manufactures automobiles and motorcycles is valued at £37 billion and has a price to earnings ratio of 10.87.