Toyota Beats Q2 Profit Forecasts, Defies Trump's Tariffs Impact
(MENAFN) Japanese automaker Toyota reported a year-over-year decline in operating profit for the April-June quarter, primarily impacted by US tariffs and other factors, according to its financial results released Thursday. Despite the setback, earnings still surpassed analysts’ expectations.
Operating income for the quarter dropped 10.9% to 1.16 trillion yen ($7.87 billion). Toyota attributed approximately 450 billion yen ($3 billion) of this decline to elevated US tariffs.
Even with this decline, operating profit exceeded market forecasts.
Net income experienced a sharper fall, sliding 36.9% year-on-year to 841.3 billion yen ($5.71 billion).
The company also downgraded its full-year operating profit outlook by 600 billion yen ($4 billion), now projecting 3.2 trillion yen ($21.72 billion).
“Due to the impact of US tariffs and other factors, actual results showed decreased operating income, and the forecast has been revised downward,” Toyota said in a statement.
On a positive note, Toyota’s sales revenue climbed 3.5% year-on-year to 12.25 trillion yen ($83.17 billion) during the quarter.
“Despite a challenging external environment, we have continued to make comprehensive investments and as well as improvements such as increased unit sales, cost reductions, and expanded value chain profits, thereby minimizing negative impacts,” the company noted.
Japanese automakers have faced headwinds since the US introduced a 25% tariff on imported vehicles in April. Data from Japan’s Ministry of Commerce reveals a 25.3% year-on-year drop in the value of Japanese car exports to the US in June, despite a 4.6% rise in export volumes over the same period.
Meanwhile, the Trump administration recently lowered reciprocal tariffs on Japanese goods to 15%, although the effective date for this reduction remains uncertain.
Under a trade agreement, Japan has committed to ramping up investment in the US, part of a $550 billion plan. Concurrently, the US tariff on Japanese automobiles is set to decrease from 27.5% to 15%.
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