Toyota Stock Soars as Profit Doubles Year Over Year


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Key Takeaways

  • Led by robust global demand for cars and with the yen at a 33-year low against the dollar, Toyota's profit doubled year over year in the first half of fiscal 2024.
  • Although hybrid and gasoline-powered cars led sales, Toyota is focusing on electrifying its vehicles.
  • The Japanese carmaker recently announced a new investment of roughly $8 billion in the Toyota Battery Manufacturing plant in North Carolina.
  • Toyota raised its full-year profit forecast by 50% to ¥3.95 trillion ($26.17 billion).

Toyota Motor (TM) shares surged more than 6% on Wednesday as a weaker yen boosted the value of the Japanese company's strong global sales.

Profits more than doubled year over year in the first half of fiscal 2024. Net income for the first six months of the fiscal year 2024 jumped to ¥2.65 trillion ($17.51 billion) from ¥1.22 trillion ($8.07 billion) last year.

Boosting Battery Investments

Toyota's range of hybrid and gas cars led sales, but the company is investing heavily in its electric vehicles (EVs).

Yesterday, the carmaker announced a new investment of about $8 billion in its Toyota Battery Manufacturing plant in North Carolina. This brings the total of Toyota's investments in global vehicle electrification to roughly $13.9 billion.

Toyota is focusing on battery technology for EVs. By investing in both lithium-ion and next-generation solid-state batteries, the Japanese group intends to have an electric option for every Toyota and Lexus model globally by 2025. Starting from 2030, it aims to sell at least 3.5 million battery-powered vehicles annually.

Enhanced Outlook

The world's largest carmaker raised its full-year fiscal 2024 net income forecast by more than 50% to 3.95 trillion yen ($26 billion), up from the previous projection of 2.5 trillion yen ($17 billion). However, its target of selling 11.38 million vehicles in the current fiscal year remains unchanged. If Toyota achieves this net income forecast, it will be a record high for the company.

An increase in the number of cars sold in every region helped increase profits, with the manufacturer of the Prius hybrid and Lexus luxury models posting record sales and production numbers this quarter. The weakening of Japan's currency also boosted Toyota's profits. The value of overseas earnings through exports becomes magnified when translated to the yen, which is currently at a 33-year low against the dollar.

There is room for further growth in Toyota's financials, as every ¥1 depreciation against the dollar benefits the company by ¥180 billion, according to the carmaker.

The Japanese group also intends to carry out a share buyback worth ¥100bn ($660 million).

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  1. Toyota. "FY2024 Second Quarter Financial Summary."

  2. Toyota. "Toyota Supercharges North Carolina Battery Plant with New $8 Billion Investment."

  3. Financial Times. "Toyota Profits Double on Strong Sales and Weakening Yen."

  4. AP. "Japanese Automaker Toyota's Profits Zoom on Cheap Yen, Strong Global Sales."

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