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Honda's Q1 operating profits fall 50% due to tariffs; it raises its full-year forecast

Honda Motors reported a 50% decline in its first-quarter operating profits on Thursday. The company attributed the drop to a stronger yen, and also the tariffs imposed by U.S. president Donald Trump. However, the company increased its forecast for the full year.

The second largest carmaker in Japan reported a quarterly operating profit of 244.2 billion yen (1.66 billion dollars) for the period April-June, which is more than 20% below the average estimate of 311.7 million yen according to LSEG's poll of seven analysts.

Honda reported that the 27.5% tariffs on U.S. imports, which comprise a 2.5% rate plus a 25% tax imposed by Trump last April, had reduced its operating profit by approximately 125 billion yen for the first quarter.

The automaker has said that the tariffs have had a smaller impact on its operating profit for the full year than they estimated in May. The automaker now expects to lose 450 billion yen for the year compared with 650 billion previously.

The company increased its forecast for full-year operating profits to 700 billion yen (from 500 billion yen) and stated that it expected the yen's value to be lower than previously anticipated.

(source: Reuters)