The Gory Details on Honda Motor's Double Miss

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Honda Motor (NYS: HMC) reported earnings on Jan. 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Honda Motor missed estimates on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share dropped significantly.

Margins shrank across the board.

Revenue details
Honda Motor logged revenue of $25.25 billion. The 10 analysts polled by S&P Capital IQ predicted sales of $27.05 billion. Sales were 2.9% lower than the prior-year quarter's $26.01 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.35. The two earnings estimates compiled by S&P Capital IQ predicted $0.44 per share on the same basis. GAAP EPS of $0.34 for Q3 were 38% lower than the prior-year quarter's $0.55 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 25.5%, 260 basis points worse than the prior-year quarter. Operating margin was 2.3%, 370 basis points worse than the prior-year quarter. Net margin was 2.5%, 130 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $31.49 billion. On the bottom line, the average EPS estimate is $0.59.

Next year's average estimate for revenue is $105.56 billion. The average EPS estimate is $1.54.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,727 members out of 1,827 rating the stock outperform, and 100 members rating it underperform. Among 494 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 478 give Honda Motor a green thumbs-up, and 16 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Honda Motor is outperform, with an average price target of $46.06.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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