Toyota Posts Record Quarterly Profit but Cuts Sales Outlook

Toyota Motor Corp.’s operating profit advanced to a second-fiscal-quarter record 827 billion yen ($6.9 billion) from 657 billion yen in July-September last year. Net income rose 14% to a quarterly record 612 billion yen ($5.1 billion).

The company’s unit sales declined by 71,000 vehicles to 2.16 million vehicles, including its Daihatsu minicar and Hino truck brands. But the weak yen hiked revenue 8% to 7.1 trillion yen ($58 billion) and contributed 160 billion yen ($1.3 billion) in profit.

Without currency effects, Toyota’s year-on-year operating income would have been almost flat.

Toyota says its automotive operating profit margin soared to 13% in Japan as export volume grew. But the company’s margin in North America, where sales slipped by about 1,000 units to 684,000 vehicles, was only 5%. The strong dollar also made exports from the region less profitable.

Toyota has trimmed its forecast for the fiscal year ending March 31 to 8.75 million wholesaled vehicles from 8.9 million because of continuing weakness in Asia, Japan and the Middle East. Wholesale deliveries totaled 8.97 million vehicles in the previous 12-month period.

The company now expects its retail sales to dip to 10.0 million in the current fiscal year from 10.27 million a year earlier. It affirms its full-fiscal-year net profit forecast of 2.25 trillion yen ($18 billion).