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Toyota Motor on Wednesday said its quarterly profit more than doubled from a year ago on strong global demand for hybrids and favorable exchange-rate moves.
The auto giant also raised its guidance for the fiscal year that will end on March 31 and increased its dividend and share-repurchase program. Its U.S.-traded shares rose more than 3% in early trading.
Toyota for years resisted making big investments in purely electric vehicles, saying repeatedly that it felt its well-regarded hybrids were a better bet for most customers. The company finally relented in June, unveiling an aggressive plan to make big investments in advanced batteries and to boost sales of its EVs to 1.5 million per year by 2026. It said Tuesday that it will spend $8 billion to greatly expand a battery plant currently under construction in North Carolina, set to open in 2025.
But with car shoppers, particularly in the U.S., edging away from EVs amid higher financing costs and concerns about public charging, Toyota is now in the position of benefiting from higher demand for its stalwart hybrids.
Sales of Toyota’s conventional hybrids rose 41% from a year ago, to about 888,000, and sales of its plug-in hybrids were up nearly 90% year-over-year to roughly 39,000. “Electrified vehicles,” including both types of hybrids, battery-electric models, and fuel cell-powered vehicles, made up 36.4% of Toyota’s total global sales in the quarter, up from 27.3% a year earlier.
Toyota said its operating profit in the quarter that ended on Sep. 30, the second quarter of its 2024 fiscal year, increased more than 155% from a year ago to 1.44 trillion yen ($9.5 billion). Strong pricing on Toyota’s hybrid models, including its new Prius, helped drive the year-over-year operating profit increase.
Toyota’s revenue of 11.44 trillion yen ($75.7 billion) was 24% higher than a year ago, as it sold more vehicles in all regions than it did in the year-ago period. Total vehicle sales were up almost 13% from a year ago, to 2.4 million.
Part of Toyota’s year-over-year profit increase was driven by exchange rates, specifically the weakening of the yen against the U.S. dollar and euro. On average, during the quarter, $1 was worth 145 yen, up from 138 yen in the same quarter of 2022. The move was even more dramatic in euro terms, from an average of 139 yen per euro a year ago to 157 yen per euro in the period.
Toyota also boosted its profit forecast for the fiscal year that will end on March 31. It now expects profit of 4.5 trillion yen ($29.8 billion), up from 3 trillion yen in its earlier guidance. It said it expects the weaker yen to account for the majority – about 1.2 trillion yen – of that increase.
The company also announced a 100 billion yen ($662 million) share buyback and increased its dividend by 5 yen from a year ago, to 30 yen (20 cents) per share.