Toyota Profits Up 9% in Q2 on Weak Yen

Toyota Motor Corp. (NYSE: TM) reported second-quarter and first-half fiscal 2016 results Thursday morning before markets opened. The Japanese automaker sold 2.16 million vehicles in the quarter ending September 30, a year-over-year decline of about 3.1%. Sales fell in all four of five of the company’s sales regions, with the biggest decline coming in Asia.

On a consolidated basis, net revenues for the quarter totaled about $58.23 billion, an increase of 8.9% year over year. Operating income increased from $5.4 billion to about $6.78 billion. Net income increased from $4.63 billion to $5.26 billion. The exchange rate for the second quarter was 122 yen to the dollar.

Toyota said it would buy back up to 150 billion yen (about $1.27 billion) worth of its shares in the last two months of its 2016 fiscal year (February and March). The company plans to cancel 80 million of its own shares, or a 2.3% company stake, at the end of this month.

For the first half of the year, global sales fell by 198,515 units to 4.28 million. Net revenue rose by 8.9% in the six-month period. Toyota sold 4.28 million units in the first half of this year, compared with 4.48 million units in the first half of 2015.

North American sales rose by 17,959 units to 1.41 million, and operating income in North America rose to $2.34 billion in the six-month period. Operating income fell by $2.34 billion.

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In Japan, sales fell by 45,832 units in the first half of the fiscal year to 984,397 units as operating profit rose to around $7.85 billion, a rise of more than 33% year over year.

In Europe, sales dropped by about 5,758 units and profits dropped by about 8.9%.

In Asia, sales dropped by 101,252 to 653.566 units sold and operating income rose by 14.7%. Toyota attributed the rise to the effects of changes in exchange rates and cost reductions.

For the fiscal year ending March 31, 2016, Toyota revised its consolidated vehicles sales forecast from 8.95 million units to 8.75 million in consideration of the latest sales trends in each region. The company also revised its consolidated financial forecasts for the fiscal year. Based on an exchange rate assumption of 118 yen to the U.S. dollar and 133 yen to the euro, Toyota now forecasts consolidated net revenue of 27.5 trillion yen ($233.1 billion), operating income of 2.8 trillion yen ($14.89 billion), income before income taxes of 2.98 trillion yen ($25.25 billion) and net income of 2.25 trillion yen ($19.07 billion).

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