Toyota Forecasts Higher Profits After Doubling Q4 Earnings

Toyota boosts full-year profit outlook to $30B, fueled by Q4 earnings surge and favorable exchange rates.

Toyota Motor Corp. has raised its profit forecast for the full fiscal year following a robust performance in the October to December quarter, where profits nearly doubled compared to the same period in the previous year. The automotive giant announced quarter profit of 1.36 trillion yen ($9 billion), a significant rise from 727.9 billion yen in 2022. This surge is attributed to the company's recovery from the adverse effects of the coronavirus pandemic on computer chip production, which had previously marred its financial outcomes.

In the first nine months of the fiscal year, Toyota's profits soared to 3.9 trillion yen ($26 billion), marking a twofold increase from the prior fiscal year. This financial upturn was partly fueled by favorable exchange rates, with a weaker yen enhancing the value of the company's overseas earnings.

Toyota's quarterly sales also experienced a notable increase, rising 23% to reach 12.04 trillion yen ($81 billion). Based on these positive trends, the company, headquartered in Toyota city, Japan, has revised its full-year profit outlook upwards to 4.5 trillion yen ($30 billion), up from the previously forecasted 3.95 trillion yen ($27 billion). Additionally, Toyota adjusted its full-year sales projection to 43.5 trillion yen ($294 billion), a slight increase from its earlier estimate.

Despite these optimistic financial revisions, Toyota has revised its full-year vehicle sales forecast downwards, now expecting to sell 9.45 million vehicles compared to the previously anticipated 9.6 million. This adjustment is still an improvement over the previous fiscal year's sales of 8.8 million vehicles.

The automotive industry has faced challenges due to a global shortage of computer chips, impacting Toyota among other automakers. Furthermore, Toyota's image has been tarnished by a scandal involving its subsidiary, Daihatsu Motor Co., which admitted to falsifying safety tests. This issue, however, is expected to have a limited impact on Toyota's overall sales and profits, given Daihatsu's relatively small contribution to Toyota's global operations. Despite the setback, Toyota has pledged to implement comprehensive reforms to prevent future misconduct.

As Toyota navigates these challenges, the company remains optimistic about its financial health, buoyed by strategic cost cuts, effective marketing efforts, and the advantageous currency exchange environment.

Source: AP