Toyota’s ADR-listed shares experienced a surge following the company’s announcement of an increase in its revenue and operating income forecast. The automaker now expects its sales revenue to reach ¥43 trillion ($284.7 billion) and operating income to reach ¥4.5 trillion ($30 billion) for the fiscal year 2024.
Toyota attributes this upward revision to currency tailwinds and its efforts to enhance profitability. The company has implemented cost reduction initiatives, moderated materials prices, and focused on marketing and price increases to achieve these projections.
In addition, Toyota has announced a share buyback plan worth up to ¥100 billion ($660 million) and raised its dividend by ¥30 ($0.20) per share. These moves aim to further boost shareholder confidence in the company’s financial prospects.
While Toyota maintains its global vehicle deliveries forecast at 11.38 million vehicles, it does anticipate a decrease in sales due to market uncertainties, particularly in China. However, the automaker expects improvements in other regions such as North America and Europe.
Interestingly, Toyota has reduced its global forecast for battery electric vehicle (BEV) sales by almost 40% to 123,000 vehicles. Despite this adjustment, the company remains optimistic as hybrid sales are expected to compensate for the difference. As part of its commitment to the electric vehicle market, Toyota also announced plans to expand a battery plant in North Carolina with an additional investment of $8 billion, anticipating increased demand for EVs in the US by 2025.
In the most recent quarter, Toyota reported impressive sales revenue of ¥11.43 trillion ($76 billion) and operating income of ¥1.44 trillion ($9.5 billion). This indicates a significant improvement in the company’s margin, which rose from 4.7% to 11.2% compared to the previous year.
Analysts view these results and the improved outlook as positive signs of recovery in the auto market after the challenges posed by the pandemic and the global chip shortage.
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