Toyota raises profit outlook on weak yen, unveils $8 billion share buyback
Profit for the quarter through end-June was $8.9 billion, marking five straight months of year-on-year declines.
Toyota Motor announced a 1 trillion yen ($8.1 billion) share buyback and raised its profit outlook, thanks to strong hybrid vehicle demand and a weak yen. This helped offset the impact of rising costs, tariffs, and supply disruptions due to the Iran conflict. The company now projects operating profit of 3.4 trillion yen for the fiscal year, surpassing the average analyst estimate of 3.9 trillion yen.
Despite these positive developments, Toyota's stock price fell 2.3% in afternoon trade. The automaker's sales forecast increased to 54 trillion yen from the previous 51 trillion yen forecast, primarily due to foreign exchange considerations. Toyota is benefiting from the enduring popularity of gas-electric hybrids, which have helped cushion the negative effects of soaring raw material costs and supply chain disruptions.
However, global sales declined for the fifth consecutive month in June, due to competition and the shift towards software-driven, battery-powered vehicles. The company still faces challenges in the Chinese market, where it lags behind local manufacturers such as BYD. To adapt, Toyota is relying more on local engineers and suppliers, and accelerating the development of models tailored to China's largest auto market.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
