Honda cuts outlook amid chip shortage, pares tariff impact estimate

Investing.com -- Honda Motor lowered its full-year earnings outlook on Friday, citing a chip shortage from Dutch supplier Nexperia and weaker vehicle sales in Asia, after reporting a sharp drop in first-half profit pressured by U.S. tariffs. However, the company said it expects a smaller tariff hit for the full year than it previously forecasted.

Net profit for the six months to September fell 37% from a year earlier to 311.83 billion yen ($2.04 billion), missing analysts’ estimates of 342.97 billion yen compiled by Quick.

The company reported an operating profit of 194 billion yen ($1.29 billion) for the July–September quarter, below the 212.1 billion yen average forecast in an LSEG poll and down from 257.9 billion yen a year earlier.

Japan’s second-largest automaker also cut its operating profit forecast for the year ending March 2026 by 21% to 550 billion yen ($3.65 billion) from 700 billion yen.

Honda trimmed its full-year vehicle sales projection to 3.34 million units from 3.62 million, citing supply constraints tied to the dispute between the Dutch and Chinese governments over control of Nexperia, as well as softer demand in Asia.

Honda forecasts revenue to fall 4.6% to 20.7 trillion yen and net profit to drop 64% to 300 billion yen, compared with earlier forecasts of 21.1 trillion yen and 420 billion yen, respectively.

On a more positive note, the company now anticipates a smaller impact from U.S. tariffs—385 billion yen for the year versus a previous estimate of 450 billion yen.

Global automakers continue to face pressure from the Trump administration’s trade measures, which have disrupted supply chains and increased costs across the industry.

Honda stock closed 1.8% in Asia trading

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