Toyota, Honda brace.....

 

Toyota, Honda brace for profit falls as US tariffs, strong yen weigh

TOKYO (Reuters) -Toyota Motor and Honda (NYSE:HMC) Motor are expected to report weaker first-quarter earnings this week, as U.S. import tariffs and a stronger yen weigh on profits despite solid demand for hybrids in their biggest overseas markets.

Japanese automakers face growing uncertainty in the U.S., where tariffs on imports are pushing up vehicle prices and testing the resilience of consumer demand. Investors will be watching for clues on how Japan’s two largest automakers are offsetting such burdens.

Toyota (NYSE:TM), the world’s top-selling automaker, is forecast to post a 31% year-on-year drop in operating profit to 902 billion ($6.14 billion) yen on Thursday, according to the average estimate of seven analysts polled by LSEG. That would mark its weakest quarterly result in more than two years.

Honda is expected to report a 36% decline in operating profit to 311.7 billion yen on Wednesday, its second straight quarterly drop. The automaker has already forecast a 59% fall in full-year profit.

Both companies face the prospect of 15% tariffs on Japanese auto imports into the U.S. from levies totalling 27.5% previously, following a bilateral trade deal last month. 

Other Japanese automakers and suppliers have also flagged weaker earnings, citing the same pressures from tariffs and the stronger currency compared to the same period a year ago.

"The first quarter is going to be a rough one for Toyota," said Christopher Richter, autos analyst at CLSA. "Things should get easier going forward," he said, citing some relief from the lowered tariffs.See more .  .