Honda Q1 FY2024 Profits Double – Stock Split Coming

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Honda Motor (7267.T) more than doubled sales in North America during Q1 of the 2024 Japanese fiscal year as it posted an operating profit of  ¥394.4 billion (~$2.76 billion – Q1 2023 ¥222.2 b) in three months through June, with an Operating Margin of 8.5%.

The sales increase in North America boosted revenues in the automobile business by~26% as the Biden Administration economic recovery continued in the US for all automakers.* (AutoInformed: GM Posts Strong Q2 Results with $3.2B in Earnings; Toyota Posts Strong FY 2024 Q1 Results – $9.2 Billion Net; US Sales Lengthen Bidenomics Growth Streak in July)

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A 3-for-1 stock split effective September 30th has been approved by management. Calculating on the current number of shares (~165,000,000) , the year-end dividend and the total annual dividend for fiscal 2024 are forecast at ¥75/share and ¥150/share. In current Tokyo trading the stock is up ~6% within ¥30 to its all-time (¥4,723) high posted in 2006.

At the end of Q1, consolidated cash and cash equivalents were at ¥4.08 trillion (~$28.25 billion). Long-term debt was ¥4.89 trillion (~$33.85 billion) up from ¥4.37 trillion as of 31 March 2023.

Honda Forecast

• Motorcycle, Automobile and Power Products sales at 19.18 million units, 4.35 million units and 4.75 million units in fiscal 2024, respectively. This compares with fiscal 2023 volumes of 18.75 million units, 3.68 million units and 5.64 million units, respectively.
• Revenues fiscal 2024 of ¥18.2 trillion, ~ +7.6% year-over-year.
• Operating profit at ¥1 trillion, or an increase of 28.1% year-over-year.
• Pretax profit of ¥1.185 billion, +34.7% year-over-year.

*”I expect that the unemployment rate will rise above 4% next year, but I can’t say with any conviction how much will that need to happen,” said John Williams, President and CEO of the Federal Reserve Bank of New York this week. “It will depend on how all the pieces come together, how much inflation continues to come down because of the reversal of some of the factors that drove it up – like the pandemic-related factors, Russia’s war in Ukraine, all of the other things… We have a path forward, where the economy continues to grow below trend and unemployment edges up somewhat, and inflation comes back down – exactly what that means for the employment rate, I can’t say with any certainty. My own view is that the unemployment rate, in order to achieve all of that, may rise to something like 4% to 4.5%, but we’ll have to see. Which is still, by historical standards, a very, very low unemployment rate.”