Toyota Records First Quarterly Profit Increase in a Year and a Half - Sarmad

Toyota reported its first profit increase in a year and a half on Thursday, while raising its annual profit forecast by 15%, supported by a weaker yen and strong demand for hybrid vehicles, which offset declining sales in China and the Middle East.

The world’s largest automaker now expects operating profits of 3.9 trillion yen ($24.6 billion) for the fiscal year ending in March next year, up from its previous forecast of 3.4 trillion yen.

Toyota’s operating profits surged 34% to 1.13 trillion yen in the July–September quarter, surpassing the average estimate of nine analysts polled by the London Stock Exchange, which stood at 992 billion yen.

Unlike other traditional automakers that heavily bet on electric vehicles and were later forced to write off billions of dollars in investments as demand waned, Toyota has focused primarily on developing hybrid technology, which combines gasoline and electric engines—a segment it popularized decades ago with the Prius model.

This strategy has been a key factor in enabling the company to defend its market share in the United States, its largest market, despite growing competition from rapidly expanding Chinese electric vehicle makers in other regions.

Nevertheless, Toyota, like other automakers, has been affected by rising fuel prices driven by the war in the Middle East.

Takanori Azuma, Toyota’s chief accounting officer, said during a press briefing that the company is working to offset the impacts of the Middle East situation and sharp increases in raw material costs by intensifying sales efforts and cutting expenses.

Toyota’s shares rose about 8% before the results announcement, as investors sold AI-related stocks and bought into large-cap companies following the U.S. midterm elections. Gains accelerated in afternoon trading, pushing the stock up more than 14%, on track to record its largest single-day gain since 2008.