Toyota reports quarterly profits of $4.2 billion: an increase of 12.6%.
With its sales on track to remain number one in the industry, Toyota Motor Co. saw its worldwide net income jump 12.6% for the first half of the fiscal year, to $10.9 billion, while income for the July to September quarter rose to $4.2 billion, exceeding industry analysts’ expectations.
The maker credited several factors, including strong demand for its vehicles in most markets, though it did see some declines in the home Japanese market and some other parts of Asia. The weak yen also contributed to the maker’s performance during the second quarter of the year – as it did for Japanese rivals Nissan and Honda.
Toyota said it now anticipates net income for the full fiscal year ending next March 31 to reach $19.2 billion, though sales dip slightly.
It also forecast revenues will reach $254.8 billion for the full year. The figure stood at $125.6 billion for the first half.
If anything, Toyota may be erring on the conservative side as it looks forward. “They’ve been reducing costs, and their yen and sales volume forecasts look conservative,” said Koji Endo, an industry analyst at Advanced Research Japan.
Toyota’s outlook may be solid, but it does face a few speed bumps. Among other things, there’s the slowdown in the overall home market that followed a sharp increase in sales taxes at the beginning of the fiscal year. Meanwhile, Japanese makers are still lagging in China as the result of a bitter political dispute.
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Another uncertainty is how things will continue to shake out as a result of the Takata airbag recall which has impacted 16.5 million vehicles worldwide, 7.8 million in the U.S. Toyota accounts for a significant share of that tally and it is unclear what the ultimate cost of making repairs will be. Critics also are calling for an increase in the recall total.
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But, so far, there has been no apparent showroom fallout, Toyota maintaining its global sales lead over Volkswagen – now the world’s number two maker – and Detroit’s General Motors. For the first nine months of 2014, Toyota has sold 7.615 million vehicles, putting it on track to become the first automaker ever to sell more than 10 million vehicles during a single calendar year.
Strong demand in North America has clearly helped, Toyota reporting it sold 1.39 million vehicles there during the first half of the fiscal year, worldwide volume reaching 4.47 million cars, trucks and crossovers.
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The maker is hoping to keep momentum building with key product launches, including a significant upgrade for the 2015 Camry model.
Analysts responded positively to news that Toyota’s latest earnings exceeded expectations. According to Zack’s consensus of analyst forecasts, the quarter was anticipated to deliver $3.14 in earnings on U.S. ADR shares. The figure actually came in at $3.28.