Toyota Motor Corp. on Friday lowered its outlook for group net profit, operating profit and sales for the business year through March due to a stronger yen, despite posting record sales and net profit in the April-June quarter.
The same day, Honda also revised down its group net profit outlook through March, after seeing first quarter profits fall due to a stronger yen and disappointing sales in the United States.
Toyota said an expected rise in the yen is the main factor behind the cuts in earnings forecasts. A strong yen erodes overseas profits when converted into the home currency.
As a result of a change in its foreign-exchange rate assumption, Toyota said operating profit would be cut by ¥350 billion for the current year.
The firm expects a net profit of ¥2.15 trillion, down from ¥2.25 trillion forecast earlier. It also downgraded its sales outlook to ¥29.5 trillion from ¥30 trillion and its operating profit outlook to ¥2.4 trillion from ¥2.55 trillion.
But for the April-June period, Toyota’s net profit rose 3.9 percent from a year earlier to ¥682.97 billion on a 3.8 percent gain in sales to ¥7.65 trillion, both record highs for the quarter, on favorable sales in Japan and Europe.
Japan’s largest automaker by volume said its operating profit climbed 8.7 percent to ¥741.95 billion.
Honda Motor Co. said group net profit in the first quarter had fallen 29.5 percent from a year earlier to ¥172.3 billion ($1.6 billion) due to the yen and sluggish sales of four-wheel vehicles in the U.S.
Its consolidated operating profit fell 15.7 percent to ¥252.47 billion on sales of ¥4 trillion, down 0.7 percent.
Honda’s group net profit outlook for the business year through March was revised down to ¥645 billion from the previously projected ¥665 billion.
Toyota said it expects the dollar to average ¥106 for the full year, compared with its earlier estimate of ¥111, and the euro to average ¥121 as opposed to ¥128.
The Toyota group, which ranked second in global sales for the first six months of 2019 after Germany’s Volkswagen AG, also revised downward its sales plan for the current fiscal year, targeting a record 10.73 million vehicles compared with an estimated 10.74 million.
The group includes vehicles produced by minicar-maker Daihatsu Motor Co. and truck maker Hino Motors Ltd.