Updated Version 2 - Toyota profits surge and annual outlook raised, with strong sales performance of hybrid vehicles

The full text includes comments from company executives and relevant background information

Daniel Leussink

Reuters Tokyo, November 5 - Toyota Motor Corporation (7203.T) on Thursday reported its first quarterly profit growth in six quarters and raised its annual profit forecast by 15%, thanks to a weaker yen and strong demand for high-margin hybrid vehicles, which offset declining sales in China and the Middle East.

This performance sent Toyota's shares soaring on the Tokyo stock market, further underscoring that the automaker’s focus on hybrid vehicles is paying off.

The world’s largest automaker said that after a better-than-expected 34% profit increase in the July–September quarter, it now expects operating profit for the fiscal year ending March to reach 3.9 trillion yen ($24.6 billion).

Unlike other traditional carmakers, which bet everything on electric vehicles but were forced to write down billions of dollars of investment as EV demand softened, Toyota has focused mainly on the gasoline-electric hybrid technology it popularized decades ago with the Prius.

This strategy is key to helping Toyota defend its market share in its main market—the United States—even as it faces threats from fast-growing Chinese EV manufacturers in other regions.

But, like its peers, Toyota was also hit by surging fuel prices triggered by the war in the Middle East.

Toyota’s Chief Financial Officer, Takanori Azuma, said at a briefing that the company is countering the impacts of the Middle East situation and the spike in raw material costs through sales efforts and cost reductions.

Prior to the earnings release, investors, reacting to the U.S. midterm elections, sold AI-related stocks and bought blue chips, already sending Toyota shares up by about 8%. The stock then extended its gains, rising over 14% in midday trading and on track for its biggest single-day jump since 2008.

Operating profit for the July-September quarter was 1.13 trillion yen, above the 992 billion yen median forecast from a LSEG poll of nine analysts.

(1 USD = 158.4300 yen)

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