Honda Motor reported a 50% drop in first-quarter operating profit on Thursday, citing the combined effects of a stronger yen and elevated U.S. import tariffs, but raised its full-year forecast as the estimated impact from trade duties eased.
The Japanese automaker posted an operating profit of 244.2 billion yen ($1.66 billion) for the April-June quarter, down from 489.5 billion yen a year earlier and below the 311.7 billion yen average estimate from a poll of seven analysts by LSEG.
The 27.5% tariff on U.S. vehicle imports, which includes the previous 2.5% rate and an additional 25% levy introduced by U.S. President Donald Trump in April, reduced Honda’s quarterly profit by around 125 billion yen.
Despite the first-quarter decline, Honda lowered its projected full-year tariff impact to 450 billion yen from 650 billion yen and raised its operating profit forecast to 700 billion yen from 500 billion yen.
The company also revised its currency assumptions, expecting a weaker yen to help support revenue from overseas markets.
