Toyota profits down in April-June quarter due to US tariffs, still beating expectations

ISTANBUL

Japanese carmaker Toyota's operating profit fell in the April-June quarter on an annual basis due to "the impact of US tariffs and other factors," yet was still above market estimates, according to its financial results released on Thursday.

The firm's operating income for the quarter fell 10.9% year-on-year to 1.16 trillion yen ($7.87 billion), while Toyota attributed its 450 billion yen ($3 billion) in losses to higher US tariffs.

Despite the downturn, operating income came above market estimates.

The company's net income was also down 36.9% on an annual basis to 841.3 billion yen ($5.71 billion).

Toyota also revised its full-year operating income forecast down 600 billion yen ($4 billion) to 3.2 trillion yen ($21.72 billion).

“Due to the impact of US tariffs and other factors, actual results showed decreased operating income, and the forecast has been revised downward,” Toyota said in a statement.

On the other hand, the Japanese car maker's sales revenues rose 3.5% year-on-year to 12.25 trillion yen ($83.17 billion) in April-June.

“Despite a challenging external environment, we have continued to make comprehensive investments and as well as improvements such as increased unit sales, cost reductions, and expanded value chain profits, thereby minimizing negative impacts,” the company noted.

Japanese car firms have been struggling since the US imposed a 25% tariff on imported cars on April.

According to data from Japan's Commerce Ministry, the value of Japanese auto exports to the US fell 25.3% year-on-year in June, despite a 4.6% increase in automobile export volumes to the country during the same period.

On the other hand, the Trump administration recently reduced reciprocal tariffs on Japanese goods to 15%, but it remains unclear when the new rate will be implemented.

Japan has pledged to boost investment in the US as part of a $550 billion initiative under a trade deal, while the US will reduce its tariff on imported Japanese cars to 15% from 27.5%.