Toyota Motor Projects Annual Profit Drop, Announces Share Buyback — Update

By Kosaku Narioka

Toyota Motor projected a drop in fiscal-year profit on higher costs and announced a share buyback after posting stronger fourth-quarter net profit thanks partly to a weaker yen.

The Japanese carmaker said Wednesday that net profit increased 80% from a year earlier to 997.6 billion yen ($6.45 billion) for the three months ended March. That beat the estimate of Y752.85 billion in a poll of analysts by data provider FactSet.

Fourth-quarter revenue rose 14% to Y11.073 trillion, supported by a weaker yen and strong sales growth in North America and Europe despite a sales slump in Japan due to certification issues at subsidiary Daihatsu Motor and affiliate Toyota Industries.

A weaker yen lifts earnings for Japanese carmakers, as it makes exports more competitive abroad and boosts the value of profits earned overseas in yen terms.

Toyota is also benefiting from a shift among consumers in the U.S. and some other markets to gasoline-electric hybrid vehicles from fully electric vehicles. More car buyers, worried about charging problems and higher prices, are choosing hybrids as a fuel-efficient option.

For the year that began in April, it projected net profit to drop 28% to Y3.570 trillion, in part because of higher costs of materials, labor and research and development expenses, and revenue to increase 2.0% to Y46.000 trillion.

Toyota also forecast that group vehicle sales will fall to 10.95 million units from the 11.09 million units it sold the previous fiscal year.

Toyota and its luxury brand Lexus expect to sell about 4.7 million hybrid vehicles this fiscal year, up from the 3.7 million units sold the previous year, and about 171,000 battery EVs, compared with about 117,000 units a year earlier.

The company said it will buy back up to Y1 trillion of its shares by the end of April 2025, partly to respond to any divestment plans from its stakeholders. It may repurchase up to 3.0% of its outstanding shares.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

May 08, 2024 02:46 ET (06:46 GMT)

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