Toyota(TM.US) Q3 profit drops 28%, raises full-year profit forecast to 4.7 trillion yen.

Toyota(TM.US) raised its full-year operating profit forecast by 9% on Wednesday, showing confidence in weathering the impact of potential US tariffs. The company raised its profit forecast for the current fiscal year ending March 2025 to 4.7 trillion yen ($307bn) from 4.3tn yen.

Toyota said the upgrade reflected its efforts to strengthen profitability through controlling incentives, raising prices, and stabilising production. It also expected to benefit from a weaker yen. Analysts on average expect profits of 4.8tn yen, as strong demand for hybrid vehicles in the US offsets weaker sales in Japan and China.

Despite a weaker-than-expected third-quarter performance and a second consecutive quarter of falling profits, Toyota raised its profit forecast. Operating profit for the three months to December totalled 1.22tn yen, down 28% from a year earlier, and missed the average forecast of 1.42tn yen from nine analysts.

Shares rose 4.3% after the results and forecast.

Toyota's profits have grown in recent quarters as strong demand for hybrid vehicles in the US and other major markets has driven results.

The company said the revised forecast reflected capital spending — or investment in people and growth areas — as well as better cost competitiveness and profitability. Toyota also invested in boosting electric vehicle capacity, with a wholly owned company in Shanghai to develop and produce electric vehicles and batteries for its luxury Lexus brand, with production to start in 2027 at an initial capacity of about 100,000 vehicles a year.

Toyota also said its $14bn plant in North Carolina would start shipping batteries for hybrid, plug-in hybrid, and electric vehicles in April. Global manufacturers such as Toyota have been hit by President Donald Trump's high tariffs, which rely on production facilities in Canada and Mexico to make and assemble vehicles for US customers.

Toyota sold 10.8m vehicles in 2024, down slightly from 11.2m in the previous year, but enough to retain its position as the world's largest carmaker for a fifth consecutive year, ahead of Volkswagen.