The largest auto manufacturer in Japan – Toyota Motor Corp. said in an official statement that it expects a record profit for a second year in a row. The companys upbeat performance is considered to be largely based on a weaker yen which boosted the value of the Lexus luxury models and SUVs sold outside the companys domestic market.
Takashi Aoki, who is a fund manager at Mizuho Asset Management Co. commented on a telephone interview for Bloomberg before the annual forecast of Toyota was released: “The impact of the yen’s depreciation is big on automakers’ earnings results. For Toyota, it could only be a benefit.”
According to Toyotas statement, the net income for the 2014-2015 fiscal year ending in March may increase to ¥2 trillion ($17.5 billion). In comparison, the company had previously forecast a net profit of ¥1.78 trillion. The Japan-based car manufacturer also boosted its expectations for the companys full-year revenue and operating profit. Toyota said that it expects a record ¥2.5 trillion operating profit for the year ending in March.
The Executive Vice President of Toyota – Nobuyori Kodaira said in a news conference: “Of course exchange rates helped, but we also made efforts to offset negatives such as a rise in fixed costs, with cost-cutting and sales efforts.”
Toyota reported that in the period from July to September its net profit increased from ¥438.4 billion in the same period a year ago to ¥539.1 billion. The result surpassed analysts preliminary estimates of ¥501.2 billion. Toyota also revealed that its quarterly revenue increased from ¥6.28 trillion a year earlier to ¥6.55 trillion.
The Japanese car manufacturer has been reporting strong sales on the territory of the United States, which is currently its largest market. This performance was a result of the regions economic recovery, as well as the easy access to financing and lower gasoline prices.
Toyota Motor Corp. rose 0.12% to close at ¥6 808 per share on Wednesday in Tokyo, marking a one-year change of +7.72%. The company is valued at ¥22.21 trillion. According to the Financial Times, the 22 analysts offering 12-month price targets for Toyota Motor Corp. have a median target of ¥7 650, with a high estimate of ¥9 400 and a low estimate of ¥6 500. The median estimate represents a 12.50% increase from the previous close of ¥6 800.
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