Key facts
- Toyota is projected to announce its fifth consecutive quarterly operating profit decrease.
- The automaker is expected to report 1.11 trillion yen ($7.04 billion) in profit for the April-June quarter.
- Global sales for Toyota and Lexus vehicles declined by 3% to over 2.5 million units during the quarter.
- A recent earthquake in southern Japan has led to production halts at four Toyota plants and affected supplier operations.
- Analysts anticipate a 5% year-over-year decline in profit.
Toyota is anticipated to report its fifth consecutive quarterly operating profit decrease this week, with analysts projecting a 5% year-over-year drop to 1.11 trillion yen ($7.04 billion) for the April-June period. Weaker global sales volumes, particularly in China and the Middle East, coupled with rising supply chain costs linked to the conflict in the Middle East, are expected to have weighed on earnings. Global sales for Toyota and Lexus vehicles fell 3% to just over 2.5 million units in the quarter.
Investors are also closely monitoring the impact of a recent earthquake on Japan's Kyushu island, which disrupted production at supplier facilities and forced Toyota to halt output at four domestic plants. Uncertainty surrounds the resumption of operations at a damaged supplier plant, Aisin, which is crucial for Toyota's supply chain.
Analysts noted that sales in Oceania and Latin America were also impacted by aggressive expansion from Chinese brands like BYD. Furthermore, the transition to a redesigned RAV4 model in the U.S. market may have affected sales. Investors will be looking for details on when sales of the new model are expected to accelerate.
Toyota's full-year operating profit forecast of 3 trillion yen remains under scrutiny, with higher material costs and earthquake-related disruptions clouding the outlook.