Toyota Second-Quarter Operating Profit Seen Rising 18%
Summary
Toyota’s second-quarter operating profit is forecast to rise 18% to 992 billion yen ($6.3 billion), according to an LSEG survey of nine analysts. It would be the automaker’s first increase in six quarters. A weaker yen and hybrid vehicles are expected to offset weak China sales.
Key Highlights
- July-September operating profit forecast: 992 billion yen
- Revenue is expected to rise 8% to 13.4 trillion yen.
- Global Toyota and Lexus sales fell 4% to just over 2.5 million units.
- China sales fell 22% and Middle East sales dropped by a third
What Happened?
Toyota is expected to report results on Thursday. Analysts’ median estimate points to Toyota’s second-quarter operating profit climbing 18%, helped by a weaker yen and the absence of US tariff-related costs that hit earnings a year earlier.
Why is it Important?
Demand for hybrid vehicles is carrying the numbers. Electrified vehicle sales in North America jumped more than 30% to almost 430,000, though overall US volumes rose less than 1%. “With gasoline prices rising, there is demand for more fuel-efficient hybrids,” said Yuya Takahashi, an analyst at Marusan Securities.
Impact and Implications
China sales remain the main concern. Domestic brands are competing hard amid a rapid shift to electric vehicles, which challenges Toyota’s gasoline- and hybrid-heavy lineup. Supplier Denso reported last week that its Asia operating profit fell by more than a third for the six months through September, citing weaker China sales and higher material costs.
What Happens Next?
Investors will watch Toyota’s investment in factory automation, vehicle software and autonomous driving. Toyota has estimated that modernising its factories could cost 1 trillion yen a year from 2028.