Toyota's operating profit jumps 34% on weaker yen as it trims sales forecast

Shares surged as much as 15% after quarterly net profit missed estimates

Toyota’s quarterly operating profit climbed 34% to ¥1.128 trillion, helped by a weaker yen and cost reductions despite disruptions caused by the Middle East conflict. Revenue grew 8.6% to ¥13.437 trillion even as vehicle sales volume fell. Alongside the results, the company trimmed its annual group vehicle sales projection to 10.99 million units from 11.18 million units forecast previously.

Net profit for the three months ended September fell 19% from a year earlier to ¥759.4 billion, equivalent to $4.79 billion. The result missed the ¥779.6 billion estimate in a poll of analysts by data provider Quick. The year-earlier bottom line was helped by higher nonoperating income.

The quarterly operating strength came even as Toyota projected net profit to drop 7.2%, to ¥3.570 trillion, for the fiscal year ending March 2027 — an improvement from its earlier view of ¥3.250 trillion.

Toyota shares surged as much as 15% after the results. The stock was already up strongly ahead of earnings, buoyed by lower oil prices and hopes for an early end to the Middle East conflict following the U.S. midterm elections.

The Japanese automaker has taken measures to mitigate the impact of disruptions caused by the Iran war and has been establishing alternative routes to shorten the time it takes to deliver vehicles to customers in the Middle East.

The company has also been taking steps to expand production capacity in the U.S. after announcing a plan last November to invest up to $10 billion in the country over the next five years. Toyota said in July it would spend $3.6 billion to bring production of its top-selling midsize pickup, the Tacoma, back to the U.S. by 2030. The company plans a second assembly line for the Tacoma at its San Antonio plant; Toyota currently builds the pickup in Mexico.

Toyota, the world’s top-selling automaker, has been hit by tariffs from the Trump administration. Making more vehicles in the U.S. will help it defray a hefty tariff bill in its largest market.

The yen’s sharp depreciation in recent years has helped boost earnings for Japanese exporters, including Toyota, by making shipments more competitive abroad and increasing the value of profits earned overseas in yen terms. The yen has depreciated about 28% against the dollar over the past five years.