Toyota raised its annual earnings forecast for 2023 after besting analyst expectations in the third quarter.
The Japanese automaker generated roughly $11.3 billion in operating profit for the third quarter ending December 31, about $2.5 billion ahead of average analyst expectations. Its success was driven in part by sales of hybrids, which rose 46%, and a 28% sales increase in North America, the brand’s largest market. Toyota’s profits were, in part, buoyed by a weakening yen. Hybrid vehicles accounted for almost a third of all vehicles sold by the brand in 2023.
Previously, the automaker expected to earn $30.3 billion in profit. Following its success in Q3, it now expects to make $33 billion, an increase of approximately 9%. The automaker’s fourth quarter ends in March. Despite the improved profit guidance, Toyota lowered its annual sales target due to delays created by ongoing investigations of its subsidiary, Daihatsu Motor. The company recently admitted it had falsified safety test records on some vehicles, prompting a series of probes from Japanese authorities. Due to the disruption, Toyota lowered its sales goal to 9.45 million units from 9.6 million units.
Toyota performed remarkably well in the latter half of 2023, rapidly making up for time lost due to supply chain disruptions created by the COVID pandemic. Its optimistic profit forecast arrives as other automakers look to reign in expectations for the coming months, with many predicting tighter profit margins and normalized demand.