Honda Announces Consolidated Financial Summary for the Fiscal 3rd Quarter Ended December 31, 2006

Tokyo, Japan, Jan. 31, 2007 - (JCN Newswire) - Honda Motor Co., Ltd. announced that it realized a seventh consecutive all-time record for consolidated net sales and other operating revenue (herein referred to as "revenue") for the fiscal third quarter due to increased sales revenue in all business areas. Consolidated operating income also increased to achieve a second consecutive all-time record for the fiscal third quarter, due to increased profit from higher revenue, cost reduction effects, and positive currency effects of the depreciation of the Japanese Yen, despite the changes in the model mix, soaring raw material costs, and an increase in selling, general and administrative (SG&A), and research and development (R&D) expenses. For the fiscal third quarter, income before income taxes and net income increased for the first time in a third quarter in three years.

At the board of directors meeting held today, January 31, 2007, Honda resolved to pay 17 yen per share for the fiscal third quarter dividend with the dividend date of record as December 31, 2006. The year-end dividend is to be 17 yen. Combined with an interim dividend of 30 yen, the total dividend to be paid for the entire fiscal year is 64 yen.

(Note) As of July 1, 2006, one share of the Company's common stock was split into two. Had the stock split not been carried out, the interim dividend would have been 60 yen per share, which is an increase of 20 yen per share and the annual dividend would have been 128 yen, which is an increase of 28 yen per share.

Results for third quarter ended Dec. 31, 2006
(*record high for fiscal third quarter.)


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                                                     Yen (billions) 
              3rd Quarter ended   3rd Quarter ended     Difference
                 Dec. 31, 2005      Dec. 31, 2006        (% change)
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Net sales and other 
 operating revenue     2,472.0           2,768.6*     +296.6(+12.0)
Operating income         194.9             205.1*      +10.1(+ 5.2) 
Income before 
 income taxes            166.0             191.5       +25.4(+15.3) 
Equity in income of 
 affiliates               29.6              25.8        -3.8(-13.0) 
Net income               133.1             144.8        +11.6(+8.8) 

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EPS (Note)            JPY72.41          JPY79.45     JPY+7.04(+9.7) 

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(Honda's average rates:  JPY 118 = U.S. dollar 1, JPY 152 = Euro 1)

(Note) As of July 1, 2006, one share of the Company's common stock was split into two, and EPS was calculated based on the issued shares after this 1:2 stock split. Consolidated unit sales: All-time record unit sales were achieved in the automobile and power product business areas for the fiscal third quarter. (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: 2.765 million units (-0.8%); the decrease was due mainly to a drop in sales in North America, despite a sales increase in South America. (Unit sales of approximately 0.64 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: 915 thousand units (+12.1%); the increase was due to increased sales in overseas markets mainly in North America, Europe, and Asia.

Power Products: 1.382 million units (+21.9%); the increase was due to sales growth in overseas markets mainly in North America and Asia.

Consolidated revenue rose to JPY 2,768.6 billion (+12.0%), a seventh consecutive all-time record for the fiscal third quarter, due to increased sales in all business areas.

Consolidated operating income totaled JPY 205.1 billion (+5.2%), the second consecutive all-time record for the fiscal third quarter. The increased profit from higher revenue, cost reduction effects, and positive effects of the depreciation of the Japanese Yen offset the negative impacts of changes in model mix, soaring raw material costs, and increases in selling, general and administrative (SG&A), and research and development (R&D) expenses.

Income before income taxes increased to JPY 191.5 billion (+15.3%), for the first increase in a fiscal third quarter in three years.

Equity in income of affiliates decreased to JPY 25.8 billion (-13.0%) due primarily to decreased income in some affiliates mainly in Asia.

Consolidated net income was JPY 144.8 billion (+8.8%), for the first increase in a fiscal third quarter in three years.

Results for the first nine months of the fiscal year (April to December 2006)

Consolidated net sales and other operating revenue for the first nine months of the fiscal year (April to December) totaled JPY 7,999.2 billion (+13.1%), a sixth consecutive all-time record. Consolidated operating income for the period was JPY 601.6 billion (+13.9%), consolidated income before income taxes was JPY 537.4 billion (+12.0%), equity in income of affiliates totaled JPY 83.4 billion (+8.6%), and consolidated net income totaled JPY 416.1 billion (+10.2%).

Forecast for fiscal year ending March 31, 2007

Honda aims to achieve JPY 11.1 trillion of consolidated revenue for the fiscal year ending March 31, 2007, which would be a seventh consecutive all-time record, based on the unit sales plan of 10.46 million motorcycles, 3.665 million automobiles and 6.12 million power products. (Unit sales of approximately 2.88 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.)

Honda will carry out its business operations based on the goals described in the following chart with assumption of the average currency exchange rate of JPY 117 = U.S. dollar 1 and JPY 149 = Euro 1 (average rate for the fiscal fourth quarter: JPY 118 =U.S. dollar 1, JPY 153 = Euro 1 ).

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                                                       Yen (billions)
                                                        (Reference):
                             Forecast for                 Previous
                Year ended   year ending    Difference    forecast
                 March 31,    March 31,     (% change)    made on
                   2006         2007                     October 25,
                                                            2006
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Net sales and     9,907.9      11,100.0       +1,192.0     11,000.0 
other operating                               (+12.0%)
revenue

Operating income
[gain on            868.9         820.0    -48.9  (-5.6%)     820.0 
Daiko-Henjo*       [730.8]                [+89.1 (+12.2%)]
excluded]

Income before
income taxes
[gain on            814.6         755.0    -59.6  (-7.3%)     745.0 
Daiko-Henjo*       [676.6]                [+78.3 (+11.6%)]
excluded]

Equity in            99.6          02.0     +2.3  (+2.4%)     101.0 
income of  
affiliates

Net income          597.0         560.0    -37.0  (-6.2%)     555.0 
[gain on           [514.2]                [+45.7  (+8.9%)]
Daiko-Henjo*
excluded]
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* the return of the substitutional portion of the Employees' Pension 
Funds to the Japanese government.