Toyota unveils US$6.3 billion buyback, raises profit outlook

[TOKYO] Toyota Motor unveiled a 1 trillion yen (US$6.3 billion) buyback and raised its profit outlook on solid sales in the US and Japan, which were boosted by a weaker yen that preceded the recent gain in the currency.

The world’s largest carmaker now sees 3.4 yen trillion in operating profit for the fiscal year through March, it said in a statement Tuesday (Aug 4).

Analysts are projecting, on average, profit of 3.9 trillion yen. The sales forecast was raised to 54 trillion yen from the prior 51 trillion yen outlook.

Toyota has benefited from the enduring popularity in the US of gas-electric hybrids, a technology it helped pioneer.

This, along with the weak yen during the first half, helped provide a buffer from soaring raw material costs and supply chain disruptions triggered by the war in Iran, which has upended many of the region’s key shipping routes.

Profit for the quarter through end-June was 1.1 trillion yen, marking five straight months of year-on-year declines. Sales for the period were 13.5 trillion yen.

Toyota had warned investors in May of a surprise drop in profit this year, citing disruption to supplies from the Iran conflict that would result in an estimated 670 yen billion hit to its bottom line.

Its largest suppliers are struggling with ballooning costs and logistical problems as well as shortages of aluminum, resins and other basic supplies.

With little visibility on when the turmoil in Iran will subside, it is hard to predict how long it will impact production.

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