Honda reports 50% drop in Q1 profit, raises full-year forecast despite tariff impact

TOKYO – Honda Motor reported a 50% drop in first-quarter operating profit on Thursday, attributing the decline to a stronger yen and the impact of U.S. President Donald Trump’s tariffs. Despite the setback, the company raised its full-year forecast.

For the April-June period, Honda posted an operating profit of 244.2 billion yen ($1.66 billion), more than 20% lower than the average estimate of 311.7 billion yen, according to a poll of seven analysts conducted by LSEG.

The steep 27.5% tariff on U.S. auto imports, which includes a previous 2.5% rate and an additional 25% levy imposed by Trump in April, reduced Honda’s operating profit by approximately 125 billion yen.

However, the automaker revised its earlier forecast and now expects the tariff impact on its full-year operating profit to be smaller than originally anticipated. Honda now expects a 450 billion yen impact for the year, down from the previous estimate of 650 billion yen.

The company also raised its full-year operating profit forecast to 700 billion yen, up from 500 billion yen. Additionally, Honda expects the yen to trade at a weaker rate than initially projected, which is expected to have a positive effect on its financial performance.