Honda Motor Co., Ltd. Reports Unaudited Consolidated Financial Results For The Fiscal First Quarter Ended June 30, 2003
Honda Motor Co., Ltd. today announced its unaudited consolidated financial results for the fiscal first quarter ended June 30, 2003.

Honda's consolidated net income for the fiscal first quarter ended June 30, 2003 totaled JPY 101.8 billion (USD 850 million), a decrease of 5.4% from the same period in 2002. Basic net income per Common Share for the quarter amounted to JPY 106.02 (USD 0.88), compared to JPY 110.42 for the same period in 2002. Two of Honda's American Depositary Shares represent one Common Share.

Unit sales in all Honda's business categories, namely motorcycles, automobiles and power products, increased for the quarter and consolidated net sales and other operating revenue (herein referred to as "revenue") totaled a record high, JPY 2,008.2 billion (USD 16,763 million), an increase of 3.7% over the corresponding period in 2002.

Revenue included currency translation effects, which had a negative impact on foreign currency denominated revenue from Honda's overseas subsidiaries translated into yen.

Honda estimates that had the exchange rate of the yen remained unchanged from the same period in 2002, revenue for the quarter would have increased by approximately 8.2%.

Consolidated operating income for the first quarter totaled JPY 150.1 billion (USD 1,254 million), a decrease of 12.1% compared to the same period in 2002.

This decrease in operating income was primarily due to the appreciation of the yen and an increase in selling, general and administrative (SG&A) expenses, which offset increased revenue, Honda's ongoing cost reduction efforts as well as a decrease of research and development (R&D) expenses.

Consolidated income before income taxes for the quarter totaled JPY 147.9 billion USD 1,235 million), a decrease of 9.6% from the same period in 2002.

With respect to Honda's sales in the fiscal first quarter by business category, motorcycle unit sales increased 9.5% to 2,001,000 units, due mainly to strong sales in Asian countries. However, revenue decreased 4.1%, to JPY 241.5 billion (USD 2,016 million) due to the appreciation of the yen against the U.S. dollar, which had negative currency translation effects.

Honda's unit sales of automobiles increased by 2.0% to 708,000 units, due primarily to favorable sales in North America, Europe and Asian countries, which offset declined unit sales in Japan. As a result, revenue increased 4.5%, to JPY 1,621.0 billion (USD 13,531 million) during the quarter.

Revenue from financial services increased 7.7% to JPY63.9 billion due mainly to higher revenue from favorable automobile sales in North America.

Unit sales of power products totaled 1,217,000 units, an increase of 8.6% compared to the corresponding period in 2002. Favorable sales of Honda's general-purpose engines in North America contributed to this increase. Revenue from power product and other businesses increased by 8.8% to JPY 85.7 billion (USD 716 million).

Forecasts for the fiscal year ending March 31, 2004

Consolidated financial forecasts

First half ending September 30, 2003

In billions of yen

Changes from FY 2003

Net sales and other operating revenue

4,050

+5.1%

Income before income taxes

298

+8.9%

Net income

206

+5.8%

Fiscal year ending March 31, 2004

In billions of Yen

Changes from FY 2003

Net sales and other operating revenue

8,300

+4.1%

Income before income taxes

648

+6.3%

Net income

451

+5.7%

Unconsolidated financial forecasts

First half ending September 30, 2003

In billions of yen

Changes from FY 2003

Net sales and other operating revenue

1,610

-1.0%

Income before income taxes

135

+11.8%

Net income

96

+4.7%

Fiscal year ending March 31, 2004

In billions of Yen

Changes from FY 2003

Net sales and other operating revenue

3,360

+1.1%

Income before income taxes

270

+11.3%

Net income

196

+15.3%

These forecasts are based on the assumption that the exchange rates for the yen to the U.S. dollar and the euro for the current fiscal year will average JPY 117 and JPY 126, respectively.

This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934. Honda's actual results could materially differ from those contained in these forward-looking statements as a result of numerous factors outside of Honda's control. Such factors include general economic conditions in Honda's principal markets, and foreign exchange rates between the Japanese yen and other major currencies, as well as other factors detailed from time to time in Honda's reports filed with the U.S. Securities and Exchange Commission.

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