Honda Cuts Annual Profit Forecast After 25% Drop in Quarterly Earnings

Honda Motor profit forecast has been lowered after the automaker reported a sharp fall in quarterly earnings. The company said on Friday that its operating profit for the second quarter dropped by 25%, mainly due to higher U.S. import tariffs and additional expenses linked to its electric vehicle development.

Honda, the second-largest carmaker in Japan, revised its profit outlook for the financial year ending March 2026. The company now expects to earn 550 billion yen ($3.65 billion), down from its earlier estimate of 700 billion yen. The updated forecast also takes into account slower production, caused by an expected shortage of semiconductor chips.

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For the July to September period, Honda posted a profit of 194 billion yen ($1.29 billion). This result came in lower than analysts’ expectations of around 212 billion yen, and it was also down from 257.9 billion yen recorded in the same quarter last year. The company said it is continuing efforts to manage costs and stabilize supply, while focusing on future electric vehicle plans.