Toyota Forecasts 20% Profit Drop on Iran Conflict

Toyota Motor Corp. forecasted a 20 percent decline in annual operating profit on Friday, citing a 670 billion yen ($4.3 billion) hit from supply disruptions and cost pressures tied to the ongoing conflict in Iran, as the company released its first earnings outlook under new CEO Kenta Kon.

The Tokyo-based automaker, the world's top-selling vehicle producer by volume, reported operating profit of 569.4 billion yen ($3.6 billion) for the three months ended March 31, down nearly 50 percent from 1.1 trillion yen a year earlier. For the fiscal year ending March 2027, Toyota projected operating profit of 3 trillion yen ($19.1 billion), a drop from 3.77 trillion yen in the prior year and well below the median analyst forecast of 4.59 trillion yen from a poll of 23 analysts by LSEG.

Toyota attributed the lower outlook to limited short-term measures against an uncertain operating environment, with mid- to long-term adjustments only partly in place. The company specifically highlighted the Middle East conflict, now in its third month, as a key factor. Suppliers have reported shortages of key materials, and Toyota noted sharp sales declines in the region after March shipment disruptions....