Toyota reports £3.72 billion of operating profit in the fiscal second quarter

Toyota reports £3.72 billion of operating profit in the fiscal second quarter
Written by:
Wajeeh Khan
November 7, 2020
  • Toyota reports £3.72 billion of operating profit in the fiscal second quarter.
  • The Japanese automaker forecasts £9.6 billion of annual operating profit.
  • Toyota says sales in China were 6.9% down in Sept on an annualised basis.

Toyota Motor Corp (TYO: 7203) raised its guidance for annual profit by over 100% on Friday as sales recovered quickly in China after months of halt due to the Coronavirus pandemic. Its earnings in the fiscal second quarter, however, were down 24%.

Shares of the company closed the regular session less than 1% down on Friday. At £51.61 per share, Toyota Motor is now 7% down year to date in the stock market after recovering from an even lower £43.68 per share. Confused about choosing a reliable stockbroker to trade online? Here’s a comparison of the top few to make selection easier for you.

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Toyota forecasts £9.6 billion of annual operating profit

Toyota now forecasts £9.6 billion of operating profit this year versus £3.68 billion that it had estimated earlier. In the previous year, the car manufacturer had reported £18 billion of operating profit. Earlier this week, Toyota donated 8,300 reusable water bottles to Tupelo Public School District.

According to Refinitiv, analysts’ estimate currently stands at a slightly lower £9.2 billion for Toyota’s annual operating profit. In the prior quarter (Q1), Toyota had registered a 40% decline in revenue, as per the report published in the first week of August.

In the quarter that concluded in September, the Japanese multinational saw £3.72 billion of operating profit versus the year-ago figure of a higher £4.87 billion. The decline was primarily attributed to the COVID-19 crisis that weighed on sales in recent months.

Sales in China were 6.9% down in September

Toyota also said on Friday that it now expects total vehicle sales to come in at 9.42 million in the ongoing financial year, that represents a 3.5% increase from 9.1 million that it had forecast earlier. The automaker’s forecast, however, is still below 10.46 million cars that it had sold last year.

As per Toyota, sales were still 6.9% down in September as compared to last year, but jumped 12.8% on a month to month basis. It was the sixth consecutive month for Toyota to have witnessed an increase in sales.

Demand for Lexus cars and electric vehicles, in particular, Toyota added, was strong in China. Toyota performed fairly upbeat in the stock market last year with an annual gain of more than 15%. At the time of writing, the Japanese multinational carmaker is valued at £170 billion and has a price to earnings ratio of 12.85.