The Gory Details on Honda Motor's Double Miss

Seth Jayson, The Motley Fool
Updated

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 thisarticle 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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