Dow Jones Newswires: Honda shares slide in Tokyo after profits miss expectations

Honda Motor’s shares
dropped sharply after its operating and net profits for the fiscal first half missed analysts’ expectations.

Shares were recently 6.0% lower at 1,555.5 yen ($10.28) after sliding as much as 7.2% earlier Friday morning. The stock is headed for its biggest daily decline since March 2020, according to FactSet.

The Japanese automaker said Thursday after the market closed that its operating profit for the April-September period rose 54% on year to Y696.57 billion, which undershot the Y744.49 billion estimate from a poll of analysts by Quick. Its net profit climbed 82% on year to Y616.30 billion in the first half, but was still below the estimate of Y628.92 billion from the Quick poll.

Honda Motor’s warranty costs for the July-September quarter were unexpected, Nomura analyst Masataka Kunugimoto said in a research report.

The warranty costs were related to automobile engine parts in North America, and while they were on the high side, they were probably a one-time event, and hence, are unlikely to warrant excessive worry, the analyst added.

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