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Key Takeaways

• Q1 revenue moved up 11.7% year-over-year to $84.82 billion, beating estimates. Meanwhile, EPS moved down to $4.47, missing forecasts.
• U.S. tariffs prompt Toyota to cut full-year profit forecast by $9.5 billion, taking the biggest hit among peers.
• Q1 operating profit fell 11% year-over-year to JPY1.17 trillion, with tariffs accounting for JPY450 billion of the drop.
• Hybrid sales remain a growth driver, pushing global H1 sales to a record 5.5 million units.
• Shares were up 6.5% in the past month but down 13% on a year-to-date basis. Zacks Investment Research gave the stock a Zacks Rank #5 (Strong Sell) rating.

Following earnings results, Toyota Motor Corporation (TM) was seen trading at around $188.64 on Friday, Aug. 9 , 2025.
 

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Image Source: Yahoo! Finance

For the quarter ended June 2025, Toyota reported revenue of $84.82 billion, an 11.7% increase year-over-year and above the Zacks estimate of $82.62 billion. However, earnings per share (EPS) came in at $4.47, down from $6.35 a year ago and below the $4.67 consensus.

Operating profit for the quarter was JPY1.17 trillion, down 11% year-over-year, exceeding consensus forecasts of JPY890 billion despite a JPY450 billion tariff-related impact.

Vehicle Sales & Production Trends

Toyota outperformed analyst expectations across several regions. Global retail unit sales reached 2.83 million, ahead of the 2.36 million estimate. Production in Japan, including Daihatsu & Hino, hit 994,000 units, topping the 940,000 forecast.

Notably, North America sales rose to 794,000 vehicles, above the expected 772,00 reading, while Africa sales also beat estimates at 60,000. Slight shortfalls were seen in Europe (actual 298,000 vs. estimated 301,000) and Asia (actual 421,000 vs. estimated 433,000).

Tariff Shock & Profit Forecast Cut

Toyota issued its sharpest warning yet on U.S. tariffs, slashing its full-year operating income forecast from JPY3.8 trillion to JPY3.2 trillion, marking a JPY600 billion downgrade. The impact from new tariffs alone is estimated at JPY1.4 trillion ($9.5 billion), far exceeding the exposure of Ford ($2 billion) and Honda (JPY450 billion).

Toyota Motor cut its full-year operating profit forecast by 16%, citing an expected $9.5 billion hit from US tariffs on imported vehicles. The firm also grapples with higher material prices and a stronger yen https://t.co/I3TNAVeSsa pic.twitter.com/sVznEYnwLM

— Reuters (@Reuters) August 7, 2025

While the recently signed U.S.–Japan trade deal pegs tariffs at 15%, uncertainty over timing and application still remains. Analysts suggest Toyota may be conservative in guidance as it works to shift production and reduce exposure.

Hybrid Demand Cushions the Blow

Despite the tariff headwinds, Toyota posted record global sales in H1 2025 at 5.5 million units, up 7.4% year-over-year, fueled by robust hybrid demand in Japan, the U.S., and China. The automaker targets 11.2 million units in full-year sales and plans to build a new domestic plant in Aichi, operational in the early 2030s.

Strategic Moves & Outlook

Toyota is exploring producing the next RAV4 SUV in the U.S. to mitigate tariff and currency risks. It is also evaluating an investment in a buyout of Toyota Industries, though analysts caution such a move could weigh on investor sentiment.

The Zacks Rank #5 (Strong Sell) rating signals potential short-term underperformance, despite recent stock gains. On a year-to-date basis, shares were down 1.69% versus the Nikkei 225’s 4.83% rise.

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