Toyota quarterly operating profit halves as Iran conflict and tariffs weigh on outlook

Toyota Motor Corp said on Friday its quarterly operating profit halved and it expects profit to fall 20% in the fiscal year that just started, as rising costs and supply disruptions linked to the Iran conflict outweighed stronger demand for hybrid vehicles.

Toyota reported operating profit of 569.4 billion yen ($3.6 billion) for the three months ended March 31, down from 1.1 trillion yen a year earlier.

Outlook misses analyst forecasts

For the current fiscal year, Toyota forecast operating profit of 3 trillion yen, below the 4.59 trillion yen median estimate in an LSEG poll of 23 analysts. The company said the Middle East crisis would have an impact of about 670 billion yen during the current financial year.

Toyota shares fell about 2.2% asourceser the results, marking their lowest close since mid-October.

Regional disruption and cost pressures

The automaker said its sales in the Middle East fell sharply in March asourceser shipments to the region were disrupted.

Toyota’s forecast is the first issued under new CEO Kenta Kon, who took the role last month. The company also highlighted the impact of U.S. tariffs, which it said reduced operating profit by 1.4 trillion yen in the fiscal year that just ended.