Toyota Motor Q3 net profit increased by 62% year-on-year, exceeding expectations, and raised full-year profit guidance | Financial Report Insights
Toyota Motor's Q3 sales slightly decreased to 2.44 million vehicles, and operating profit fell by 28% year-on-year. Nevertheless, net profit increased by 62% year-on-year to 2.19 trillion yen. The company expects full-year net profit of 4.52 trillion yen and operating profit of 4.7 trillion yen, both of which have been revised upward from previous guidance
Affected by the decline in global sales, Toyota's operating profit fell for the second consecutive quarter in Q3, but net profit surged 62% year-on-year, raising the full-year profit guidance.
On Wednesday, February 5, Toyota Motor Corporation announced its Q3 earnings report for the fiscal year 2025 (the quarter from October to December 2024).
1) Key Financial Data:
Sales & Revenue: Toyota's Q3 sales decreased from 2.55 million units in the same period last year to 2.44 million units, with Q3 revenue reaching 12.39 trillion yen (approximately USD 80.883 billion).
Profit: Toyota's Q3 net profit was 2.19 trillion yen (approximately USD 14.296 billion), a year-on-year increase of 62%, compared to an estimate of 1.19 trillion yen, but operating profit fell 28% year-on-year to 1.22 trillion yen (approximately USD 7.8 billion).
R&D Expenses: Toyota's Q3 R&D expenses increased by 13% year-on-year to 336.8 billion yen, exceeding the expected 326.37 billion yen.
2) Performance Guidance
Sales Revenue: The full-year net sales are expected to be 47 trillion yen, up from the previous sales guidance of 46 trillion yen, with an estimate of 47.06 trillion yen.
Profit: The full-year net profit is expected to be 4.52 trillion yen, an increase from the previous estimate of 3.57 trillion yen, exceeding the expected 4.04 trillion yen; the full-year operating profit guidance has been raised from 4.3 trillion yen to 4.7 trillion yen.
Dividends: The guidance for dividends remains at 90 yen, higher than last year's 75 yen.
The report indicated that thanks to capacity recovery and exchange rate effects, Toyota's sales revenue increased in the first three quarters, but operating profit declined, mainly due to falling sales and one-time expenses.
Regionally, Toyota's profits in North America and Asia have significantly declined. In North America, operating profit fell 74% year-on-year to 113.7 billion yen, while in Asia, operating profit decreased by 19%, exceeding 46 billion yen.
Despite the year-on-year decline in Q3 sales revenue and operating profit, Toyota's stock price in Japan still rose during trading. Analysts believe that Toyota's relatively slow layout in the all-electric vehicle sector previously, along with the establishment of its wholly-owned subsidiary in China, reflects the company's proactive stance on electrification, focusing on the production of pure electric vehicles under the Lexus brand.
As of the time of writing, Toyota's stock price increase has expanded to 2.9%.
