Honda Announces Consolidated Financial Summary for the Fiscal 1st Quarter Ended June 30, 2007; All-time Q1 Record for Net Sales, Operating Income, Income before Income Taxes, and Net Income

JCN Newswires, July 25, 2007

Tokyo, Japan, July 25, 2007 - (JCN Newswire) - Honda Motor Co., Ltd. announced that it achieved its seventh consecutive all-time record for first quarter's consolidated net sales and other operating revenue due to increased sales revenue in all business areas.

Operating income increased and set an all-time record for a first quarter result due to increased profit from higher revenue, cost reduction effects, and positive currency effects of the depreciation of the Japanese Yen, despite the soaring raw materials costs and higher depreciation expenses and an increase in selling, general and administrative (SG&A) expenses and research and development (R&D) expenses. Honda also achieved all-time record results for a first quarter for income before income taxes and net income, and an all-time record for any quarter in equity in income of affiliates.

At the board of directors meeting held today, Honda resolved to pay 20 yen per share for the fiscal first quarter dividend with the record date of June 30, 2007. The total dividend to be paid for the entire fiscal year will be 80 yen per share.

Results for Fiscal First Quarter Ended June 30, 2006

(*record high 1st quarter, **record high any quarter)

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                                                            (yen billions)
                             Q1 ended June 30,
                           2006           2007     Difference     Change
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Net sales and
 other operating
 revenue                2,599.7       2,931.1*          331.3      12.7%

Operating income          203.5         221.6*           18.1       8.9%

Income before
 income taxes(*1)         191.3         218.2*           26.8      14.1%

Equity in income
 of affiliates             30.1          37.0**           6.8      22.6%

Net income                143.4         166.1*           22.7      15.8%

Basic net income
 per common share(Y)(*2)  78.46         91.38           12.92      16.5%

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(Honda's average rates: JPY 121 = U.S. dollar 1 / JPY162= Euro 1)
(*1)Income before income taxes for the previous fiscal year ended March
31, 2007 was adjusted to match the method used this current fiscal year.
(*2)As of July 1, 2006, one share of the Company's common share was split
into two. Basic net income per common share was calculated based on the
number of outstanding shares after this split.

Consolidated unit sales: All-time record unit sales were realized in the automobile business. (The total includes fully finished products made by Honda and its subsidiaries as well as unit sales of fully finished products and parts produced locally by affiliates accounted for under the equity method.)

- Motorcycles: 2.253 million units (-5.3%); the decrease was due to declined sales of production parts for overseas affiliates mainly in Asia which are accounted for under the equity method. (Unit sales of approximately 1.1 million units of Honda-brand motorcycle products are not included in the total listed above, in conformity with U.S. generally accepted accounting principles, because they are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its consolidated subsidiaries.)

- Automobiles: 946 thousand units ( 5.6%); the increase was due to higher sales in overseas markets, mainly in North America, Europe and Asia. This is the ninth consecutive year for automobile unit sales to increase in the fiscal first quarter.

- Power Products: 1.529 million units (-11.3%); the decrease was due mainly to declined sales in North America.

Consolidated revenue increased in all business areas and totaled JPY 2,931.1 billion ( 12.7%), realizing an all-time record for the fiscal first quarter for the seventh consecutive year.

Consolidated operating income increased in the fiscal first quarter for the fourth consecutive year and totaled JPY 221.6 billion ( 8.9%), due to increased profit from higher revenue, cost reduction effects, and positive currency effects of the depreciation of the Japanese Yen which offset the soaring raw materials costs and higher depreciation expenses and an increase in SG&A expenses and R&D expenses.

Consolidated Income before income taxes totaled JPY 218.2 billion ( 14.1%), increasing in the fiscal first quarter for the second consecutive year.

Equity in income of affiliates totaled JPY 37.0 billion ( 22.6%), increasing in the fiscal first quarter for the eighth consecutive year due mainly to the increased income of affiliates in China accounted for under the equity method.

Consolidated Net income totaled JPY 166.1 billion ( 15.8%), increasing in the fiscal first quarter for the second consecutive year.

Forecast for the Fiscal Year Ending March 31, 2008

Honda is planning for unit sales totals of 9.93million motorcycles, 3.96 million automobiles, and 6.22 million power products. (Unit sales of approximately 4.84 million units of Honda-brand motorcycle products are not included in this total, in conformity with U.S. generally accepted accounting principles, because they are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its consolidated subsidiaries.)