TOKYO: Honda Motor reported a 50% drop in first-quarter operating profit on Thursday, as a stronger yen and the impact of U.S. President Donald Trump’s tariffs took a toll on its results, but the company raised its full-year forecast.

Japan’s second-biggest carmaker said quarterly operating profit totalled 244.2 billion yen ($1.66 billion) in the April-June period, more than 20% lower than the average estimate of 311.7 billion yen in a poll of seven analysts by LSEG.

Honda said the steep 27.5% tariffs on U.S. auto imports – comprised of a previous 2.5% rate and a 25% levy imposed by Trump in April – pulled down its operating profit for the quarter by about 125 billion yen.

But the automaker said the impact from the tariffs on its full-year operating profit was smaller than it had estimated in May. It now expects a 450 billion yen hit for the year, compared to 650 billion yen forecast previously.

The company raised its full-year operating profit forecast to 700 billion yen from 500 billion yen, and said it expected the yen to trade at a weaker rate than it had previously estimated.

Reuters