Toyota Motor Corporation has raised its operating profit forecast for the financial year ending March 2027 by 13%, despite reporting a fifth consecutive quarterly decline in earnings. The world’s largest automaker now expects operating profit of 3.4 trillion yen (approximately $21.6 billion), up from its previous forecast of 3 trillion yen. Toyota attributed the upward revision primarily to the weakening Japanese yen, which boosts the value of overseas earnings when converted into yen. The company also cited improved marketing efforts and higher vehicle sales supported by the establishment of alternative logistics routes to the Middle East.
How Did Toyota Perform in the First Quarter?
Toyota reported operating profit of 1.06 trillion yen ($6.7 billion) for the April–June quarter, representing a 9% decline compared with the same period last year and marking the company’s fifth consecutive quarterly earnings decrease. The result fell short of analysts’ median estimate of 1.11 trillion yen, according to an LSEG survey. The decline was largely driven by weaker vehicle sales in China, where intense competition and pricing pressure continue to affect major global automakers.
What Measures Is Toyota Taking to Support Shareholders?
Alongside its earnings announcement, Toyota unveiled a major shareholder return programme, announcing plans to repurchase shares worth up to 1 trillion yen, equivalent to approximately 4.22% of its outstanding shares. The company also said it intends to cancel 200 million shares, a move aimed at enhancing shareholder value and improving capital efficiency despite ongoing market challenges in China.
What Challenges and Opportunities Lie Ahead?
While Toyota continues to face pressure from slowing demand and fierce competition in the Chinese automotive market, the company expects favourable currency movements and stronger performance in other international markets to support earnings during the remainder of the financial year. Improved supply chains, particularly through alternative logistics routes serving the Middle East, are also expected to strengthen sales and operational resilience.