Honda (HMC) Q4 Earnings Beat, FY22 Sales View Encouraging
Honda HMC reported earnings of $1.17 per American depositary receipt for fourth-quarter fiscal 2021, breezing past the Zacks Consensus Estimate of 43 cents on higher-than-anticipated revenues. The bottom line turned around from the year-ago loss of 16 cents per share. Quarterly revenues totaled $34,198 million, beating the Zacks Consensus Estimate of $33,121 million. Moreover, the top line inched up 7.7% year on year.
Segmental Highlights
For the three-month period ended Mar 31, 2021, revenues from the Automobile segment climbed 3.4% year over year to ¥2.4 trillion ($22.8 billion), primarily on sales growth in Asia. The segment registered an operating profit of ¥37.6 billion ($355 million), turning around from the year-ago loss of ¥75.7 billion. Cost-containment efforts and changes in sales volume aided margins.
Revenues from the Motorcycle segment came in at ¥529.1 billion ($5 billion), up 11.7% year over year, chiefly on account of sales growth in Asia. The unit’s operating profit came in at ¥72.2 billion ($682 million), rising from ¥63.5 billion recorded in the year-ago quarter. Changes in sales volume and model mix as well as cost-mitigation efforts resulted in this upside.
Revenues from the Financial Services segment totaled ¥643.6 billion ($6 billion), edging up 2.4% year on year. The unit’s operating profit skyrocketed 364.6% year over year to ¥106.4 billion ($1 million). This upswing primarily resulted from the year-on-year difference in the amount of the provision for credit losses recorded.
Revenues from the Life Creation and Other Business came in at ¥100.4 billion ($948.1 million), up 3% year over year. The segment incurred an operating loss of ¥3,051 million ($28.8 million), which narrowed from the loss of ¥16,369 million posted in the corresponding period of the prior year amid improved contribution from the aircraft and aircraft engine business.
Dividend, Financials & View
The Zacks Rank #3 (Hold) company paid a quarterly dividend of ¥54 per share to shareholders. Total annual dividend per share paid in fiscal 2021 was ¥110. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Honda has changed its profit redistribution policy and now intends to make semiannual payouts instead of quarterly payments. It will be paying an interim and a year-end cash dividend of ¥55 per share each in fiscal 2022.
Consolidated cash and cash equivalents were ¥2.76 trillion ($24.9 billion) as of Mar 31, 2021. Long-term debt was ¥4.71 trillion ($42.6 billion).
For fiscal 2022, Honda — whose peers include Toyota TM, Volkswagen VWAGY and General Motors GM — forecasts sales and operating profit of ¥15.2 trillion and ¥660 billion, respectively. While the sales forecast indicates an upswing from ¥13.2 trillion recorded in fiscal 2021, the operating profit guidance suggests almost no change from fiscal 2021 reported levels.
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