Toyota Lifts Earnings Forecast; Stock Posts Biggest Gain in 39 Years — Update

By Kosaku Narioka

Toyota Motor raised its annual earnings forecast after a weaker yen and cost cuts bolstered quarterly operating profit, signaling confidence in navigating the disruptions caused by the Iran war.

Shares of Toyota, the world's largest automaker, surged as much as 17% in Tokyo, marking their biggest one-day percentage gain since 1987. The stock was already up strongly ahead of earnings, buoyed by lower oil prices and hopes for an early end to the Middle East conflict following the U.S. midterm elections, but it rallied further after the results.

Chief Financial Officer Yoichi Miyazaki said Thursday that there is further room for cost reduction. "We haven't been able to bounce back from the impact of (U.S.) tariffs and the situation in the Middle East," he said.

Commenting on the U.S. election results, Hiroyuki Ueda, chief officer of the company's external and public affairs group, said various policies may change in the U.S.

"We want to keep doing what we do without wavering, which is to deliver great cars to our customers," he said.

The Japanese automaker has taken measures to mitigate the impact of disruptions caused by the Iran war, such as establishing alternative routes to shorten the time it takes to deliver vehicles to customers in the Middle East.

The carmaker has also implemented steps to expand production capacity in the U.S., after it announced a plan last November to invest up to $10 billion in the country over the next five years.

Toyota in July said it would spend $3.6 billion to bring production of its top-selling midsize pickup, the Tacoma, back to the U.S. by 2030. The company plans to build a second assembly line for the Tacoma at its San Antonio plant. Toyota currently builds the Tacoma in Mexico.

The Japanese carmaker, like many of its rivals, has been hit by the Trump administration's tariffs. Making more vehicles in the U.S. will help Toyota, the world's top-selling automaker, defray a hefty tariff bill in its largest market.

A powerful earnings tailwind for Japanese exporters, including Toyota, has been the yen's sharp depreciation in recent years. A weaker yen makes shipments more competitive abroad and boosts the value of profits earned overseas in yen terms. The Japanese currency has depreciated about 28% against the dollar over the past five years.

Toyota's net profit for the three months ended September fell 19% to 759.4 billion yen, equivalent to $4.79 billion, undershooting analysts' estimate of Y779.6 billion in a poll by data provider Quick. The year-earlier bottom line was helped by higher nonoperating income.

Operating profit climbed 34% to Y1.128 trillion despite the Middle East disruptions, thanks to the yen's weakness and cost reductions. Revenue grew 8.6% to Y13.437 trillion even though vehicle sales volume fell, especially in China.

For the fiscal year ending March, it projected net profit to drop 7.2% to Y3.570 trillion, an improvement from its earlier view of Y3.250 trillion. Toyota trimmed its annual group vehicle sales projection to 10.99 million units from 11.18 million units forecast previously.

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

(END) Dow Jones Newswires

November 05, 2026 06:54 ET (11:54 GMT)