Toyota has raised its full-year earnings forecast, citing factors such as a weaker yen and reduced impact from the Iran conflict, while also unveiling a share buyback program worth over $6 billion amid a sharp rise in quarterly net profit.
The Japanese automaker reported robust net profit for the three months ending June, driven by a softer yen and higher financial gains, even as vehicle sales were hampered by a decline in the Middle East region. Toyota also lowered its estimate of the impact from war-related disruptions on performance, now expecting an operating profit loss of 510 billion yen (approximately $3.24 billion) for the fiscal year through March 2027, down from a previous projection of 670 billion yen.
Toyota Chief Accounting Officer Toshinori Higashi stated that the company has been establishing alternative routes to shorten vehicle delivery times to customers. The firm announced plans to repurchase up to 1 trillion yen (about $6 billion) of its own shares over the next year, a program that could buy back up to 4.2% of outstanding stock. The shares closed down 1.5% following the first-quarter results and have fallen 13% year-to-date, pressured by higher energy costs and weaker consumer confidence due to the Middle East conflict.
After announcing plans last November to invest up to $10 billion in the United States over five years, the Japanese automaker is taking steps to expand production capacity in the country. In July, Toyota said it would spend $3.6 billion to move production of its best-selling midsize pickup truck, the Tacoma, back to the US by 2030. The company plans to build a second assembly line for the Tacoma at its San Antonio plant, as it currently produces the vehicle in Mexico. Manufacturing more cars in the US will help the world's top-selling automaker manage high tariffs in its largest market.
Toyota has been hit by tariffs under the Trump administration, with Japanese cars subject to a 15% duty under a trade agreement reached with Tokyo in July of last year. In recent years, the yen has depreciated significantly, helping Japanese exporters like Toyota boost earnings by making exports more competitive overseas and increasing the value of overseas profits in yen terms. Over the past four years, the yen has weakened by about 15% against the US dollar.
The Japanese automaker reported a 76% surge in first-quarter net profit to 1.48 trillion yen, surpassing the 978.49 billion yen average estimate from analysts surveyed by data provider Quick. Revenue rose 10% to 13.53 trillion yen. For the fiscal year through March 2027, Toyota expects revenue to grow 6.5% to 54.00 trillion yen, while net profit is forecast to decline 15.5% to 3.25 trillion yen, compared with prior forecasts of 51.00 trillion yen in revenue and 3.00 trillion yen in net profit. Toyota maintained its annual group vehicle sales forecast at 11.18 million units.