A 2022 Toyota Mirai hydrogen fuel cell car (right) is seen next to a Toyota Prius hybrid at AutoMobility LA ahead of the Los Angeles Auto Show on Wednesday, November 17, 2021 in Los Angeles, California.
Guan Bing | Bloomberg | Getty Images
Toyota Motor Corp said on Wednesday its quarterly profit more than doubled from a year ago on strong global demand for hybrid vehicles and favorable currency movements.
The auto giant also raised its guidance for the fiscal year ending March 31 and increased its dividend and stock buyback program. Its U.S.-listed shares rose more than 3% in early trading.
Toyota has for years resisted large-scale investments in fully electric vehicles and has repeatedly said it believes its well-regarded hybrids are a better choice for most customers. The company finally backed down in June, unveiling an aggressive plan to make massive investments in advanced batteries and boost its electric vehicle sales to 1.5 million vehicles per year by 2026. The company said on Tuesday it would spend $8 billion to significantly expand a battery factory currently under construction. The construction project in North Carolina is expected to open in 2025.
But Toyota is now benefiting from higher demand for its powerful hybrids as car consumers, especially in the United States, turn away from electric vehicles due to rising financing costs and concerns about public charging.
Toyota’s sales of traditional hybrid vehicles increased by 41% year-on-year to approximately 888,000 units, while sales of plug-in hybrid vehicles increased by nearly 90% year-on-year to approximately 39,000 units. “Electric vehicles”, including hybrid vehicles, pure electric vehicles and fuel cell vehicles, accounted for 36.4% of Toyota’s total global sales this quarter, up from 27.3% in the same period last year.
Toyota said operating profit for the quarter ended September 30, the second quarter of fiscal 2024, rose more than 155% year-on-year to 1.44 trillion yen ($9.5 billion). Strong pricing on Toyota’s hybrid models, including the new Prius, helped boost annual operating profit.
Toyota’s revenue was 11.44 trillion yen ($75.7 billion), up 24% from the same period last year as the company sold more cars in all regions compared with the same period last year. Total vehicle sales increased nearly 13% from a year ago to 2.4 million units.
Part of Toyota’s year-over-year profit increase is due to currency exchange rates, particularly the weakening of the yen against the dollar and euro. On average, one U.S. dollar was worth 145 yen this quarter, up from 138 yen in the same quarter of 2022. In euro terms, the move was even more dramatic, rising from an average of 139 yen per euro a year ago to 157 yen per euro during the period.
Toyota also raised its profit forecast for the fiscal year ending March 31. Profit is now expected to be 4.5 trillion yen ($29.8 billion), up from previous guidance of 3 trillion yen. The company said it expects the weaker yen to account for most of this growth (about 1.2 trillion yen).
The company also announced a 100 billion yen ($662 million) stock buyback and increased its dividend by 5 yen from a year ago to 30 yen (20 cents) per share.
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