Toyota Raises Annual Profit Forecast Despite Quarterly Decline

Toyota Motor Corp. increased its full-year earnings outlook after stronger revenue and resilient vehicle demand helped offset a decline in quarterly profit. The Japanese automaker reported Thursday that net profit for July-September fell 19% year over year, while its revised forecast points to 3.57 trillion yen in profit for the fiscal year ending March 2027.

Net profit for the second fiscal quarter reached 759.4 billion yen ($4.8 billion), down from 932 billion yen during the corresponding period a year earlier, according to Toyota. However, quarterly revenue increased to 13.4 trillion yen from 12.4 trillion yen.

The company raised its annual profit projection from 3.25 trillion yen, although the new estimate remains below the 3.8 trillion yen recorded in the previous fiscal year.

Automotive operations continued to face pressure from U.S. tariffs, supply chain disruptions and higher raw material expenses associated with the war in the Middle East. Toyota said it limited the impact of rising material costs through adjustments to its global supply network and sustained vehicle sales.

For the first six months of the fiscal year, Toyota recorded a profit of 2.2 trillion yen, compared with nearly 1.8 trillion yen in the same period a year earlier. Revenue climbed to 26.96 trillion yen from 24.6 trillion yen, according to the company's financial results.

Toyota sold 4.76 million vehicles worldwide during the first fiscal half, slightly below the 4.78 million units recorded a year earlier. The company expects global sales to reach 9.7 million vehicles for the full fiscal year, compared with nearly 9.6 million in the previous year.

Regional performance varied across major markets. Toyota experienced weaker vehicle sales in China, partly amid rising gasoline prices, while demand remained strong in the United States and held steady in Japan and Europe, according to the company.

In Japan, the RAV4, bZ4X and Land Cruiser FJ sport utility vehicles were among the models recording strong sales. In the United States, the Camry and RAV4 hybrid models performed well, Toyota said.

Sales across Asia remained flat overall, although the company recorded growth in Indonesia and Thailand.

Currency movements also supported Toyota's financial performance. Like other Japanese exporters, the automaker benefits from a weaker yen because overseas earnings translate into larger amounts of Japanese currency.

The U.S. dollar traded at approximately 158 Japanese yen, compared with 154 yen a year earlier, providing a more favorable exchange-rate environment for companies generating substantial overseas revenue.

Toyota's earnings announcement also prompted a rise in its shares in Tokyo trading. The stock climbed to approximately 3,500 yen from around 3,200 yen following the financial results.