Toyota's Q4 Revenue Surges 12% Despite 33% Profit Drop

Toyota Motor Corporation (TM.US) reported its fourth quarter and full-year financial results for the fiscal year ending March 31, 2025. The company's fourth-quarter revenue stood at 12.36 trillion yen, a 12% year-over-year increase, slightly above the average analyst estimate of 12.14 trillion yen. However, net profit for the quarter was 664.6 billion yen, a 33% decrease from the previous year, falling short of the average analyst estimate of 823.6 billion yen.

For the full fiscal year, Toyota's revenue reached 48.04 trillion yen, a 6.5% increase from the previous year. Operating profit was 4.80 trillion yen, a 10.4% decrease year-over-year. Net income attributable to the company was 4.77 trillion yen, a 3.6% decrease from the previous year. The company's total vehicle sales for the fiscal year were 11.01 million units.

Looking ahead, Toyota, the world's largest automaker, forecasts that its operating profit for the fiscal year ending March 31, 2026, will be 3.8 trillion yen, a 21% decrease from the previous year. This forecast is significantly lower than the average analyst estimate of 4.7 trillion yen. The company also expects full-year revenue to be 48.5 trillion yen, slightly below the average analyst estimate of 48.9 trillion yen, and net income to be 3.1 trillion yen, also below the average analyst estimate of 4.1 trillion yen. Toyota anticipates vehicle sales for the fiscal year to reach 11.2 million units.

Toyota is facing challenges due to the tariff policies implemented by the Trump administration. The company's exports to the United States are expected to be impacted by tariffs, and the trade war could lead to a decline in consumer confidence in the U.S. and other regions, potentially hindering Toyota's vehicle sales. Additionally, Toyota attributes the expected decline in profits for the fiscal year 2026 to the negative impact of a stronger yen, rising raw material prices, and tariffs. The company has already accounted for an 180 billion yen negative impact on profits for April and May due to U.S. tariff policies.

Toyota acknowledges that the uncertainty surrounding tariff policies makes it difficult to predict future developments. The company's management stated that, in the long term, Toyota will continue to make progress in local production and development. In the short term, the company will focus on optimizing operations to best meet demand. Despite the complexities that tariff policies bring to investment plans, Toyota remains committed to its business in the United States. If Toyota decides to further expand its production base in the U.S., it may face high labor costs and be forced to increase investment, similar to other global automakers operating in the region.