Toyota raises forecasts as strong hybrid demand boosts profits – NBC 5 Dallas-Fort Worth
- Toyota’s profits doubled, partly due to strong demand for hybrid cars.
- The Japanese auto giant is poised to benefit from slowing demand for electric vehicles in the United States
- Toyota also raised its forecasts for its full fiscal year.
Toyota Motor Co said on Wednesday that its quarterly profit more than doubled from a year ago due to strong global demand for hybrid vehicles and favorable exchange rate movements.
The auto giant also raised its guidance for the fiscal year that ends March 31 and increased its dividend and share buyback program. Its US-traded shares rose more than 3% in early trading.
Toyota has for years resisted making major investments in purely electric vehicles, repeatedly saying it felt its highly regarded hybrid vehicles were a better bet for most customers. The company finally relented in June, unveiling a bold plan to make big investments in advanced batteries and boost sales of its electric vehicles to 1.5 million a year by 2026. It said Tuesday it would spend $8 billion to dramatically expand its existing battery factory. Construction is in North Carolina, and is scheduled to open in 2025.
But with car shoppers, especially in the United States, turning away from electric vehicles amid rising financing costs and concerns about overhead charges, Toyota is now in a position to benefit from rising demand for its powerful hybrids.
Sales of Toyota’s conventional hybrid vehicles rose 41% year-over-year, to about 888,000 vehicles, and sales of its hybrid vehicles rose nearly 90% year-over-year to approximately 39,000 vehicles. “Electric vehicles,” including both types of hybrids, battery electric models, and fuel cell vehicles, accounted for 36.4% of Toyota’s total global sales in the quarter, up from 27.3% a year earlier.
Toyota said its operating profits in the quarter ending September 30, which is the second quarter of fiscal year 2024, increased more than 155% from a year ago to 1.44 trillion yen ($9.5 billion). Strong pricing for Toyota’s hybrid models, including the new Prius, helped boost operating profits year over year.
Toyota’s revenue of 11.44 trillion yen ($75.7 billion) was 24% higher than last year, as it sold more vehicles in all regions than in the same period last year. Total car sales increased by approximately 13% over last year, reaching 2.4 million cars.
Part of Toyota’s year-over-year profit increase was driven by exchange rates, specifically the weakening of the yen against the US dollar and the euro. On average, during the quarter, one dollar was worth 145 yen, up from 138 yen in the same quarter in 2022. The move was even more dramatic in euro terms, from an average of 139 yen per euro a year ago to 157 yen per euro. . in this period.
Toyota also boosted its earnings forecast for the fiscal year that ends March 31. It now expects earnings of 4.5 trillion yen ($29.8 billion), up from 3 trillion yen in its previous guidance. She said she expects the weaker yen to account for the majority of this increase — about 1.2 trillion yen.
The company also announced a 100 billion yen ($662 million) share buyback and increased its dividend by 5 yen from a year ago, to 30 yen (20 cents) per share.
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