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Honda (HMC) Q2 Earnings: Is a Disappointment in Store?

Honda Motor Co., Ltd. HMC is set to report second-quarter (ended Sep 30, 2016) fiscal 2017 results on Oct 31. In the last quarter, the company posted a positive earnings surprise of 32.39%. Let's see how things are shaping up for this announcement.

Factors Influencing this Quarter

Honda is concentrating on infrastructural development in North and South America to boost production. The automaker is also focused on introducing new products and expanding its business in Asia to attract more customers. The company's product launches help boost sales volume. Driven by these, Honda reported a 3.3% rise in U.S. sales to 1.23 million units in the first nine months of 2016. The company also has an impressive line-up of motorcycles.

However, Honda is witnessing declining sales volume in its domestic market, Japan. Sales in the Japanese market fell 6.9% year over year to 466,851 units in the first nine months of 2016.

Moreover, higher research and development expenses are affecting the company's operating income. It rose 4.3% year over year in first-quarter fiscal 2017 and is expected to increase for the fiscal. Further, Honda is being affected by...