Toyota Motor Corp more than doubled its full-year operating profit forecast on Friday as car sales in China rebounded after the country overcame the coronavirus pandemic, which slashed the company's profits by 24% earlier this year.
Japan's leading automaker said it now expects operating income of 1.3 trillion yen (roughly $ 12.6 billion) in fiscal 2020-21, up from the 500 billion it had previously forecast. Operating income for the previous fiscal year was 2.47 trillion yen.
This is above the average annual profit estimate of 1.25 trillion yen from 26 analysts surveyed by Refinitiv.
As calculated by Reuters , Q2 From July to September, Toyota Motor's operating profit fell to 506 billion yen from 662.4 billion in the same period a year earlier, as sales fell amid the global impact of the coronavirus.
However, the numbers have already shown progress compared to April-June, said CFO Kenta Kohn.
"If you compare Q2 to Q1, you see a sharp recovery," Cohn said during an online press briefing.
Investor reaction was low-key, with stocks up just 0.5% by the close of trading in Tokyo, while the Nikkei benchmark rose 0.9%.
Investors are looking at Toyota's business overseas, and given the rise in the yen (against the dollar) and the new wave of coronavirus, we should cautiously consider revising (the earnings forecast), "said Kazuo Kamiya, fund manager. Nomura Securities.
Although demand is still lower than last year, it has rebounded, especially in China, the world's largest auto market. Overall auto sales in China rose 12.8% in September for the sixth straight month, although sales were still 6.9% lower than in the same period a year earlier.