Toyota expects first operating profit growth in six quarters
Analysts project an 18% increase in Toyota's quarterly operating profit, driven by strong hybrid sales and favorable currency tailwinds.
Toyota is set to report its first operating profit growth in six quarters on Thursday, with analysts surveyed by LSEG projecting an 18% year-on-year rise to 992 billion yen for the July-September period. This recovery comes despite a 4% decline in global sales volume for the Toyota and Lexus brands.
The profit improvement is largely attributed to the depreciation of the yen and sustained demand for high-margin hybrid vehicles, particularly in North America, where sales of electrified models rose by 30%. Furthermore, the absence of U.S. tariff costs that impacted the previous year’s performance has provided a necessary boost to margins.
However, the company faces significant headwinds in international markets. Sales in China dropped 22%, while Middle Eastern demand fell by one-third, signaling intense pressure from local competitors in the electric vehicle transition. Investors are now closely monitoring Toyota's commitment to long-term efficiency, including a planned 1 trillion yen annual investment in factory automation and vehicle software starting in 2028.