Toyota raised its annual operating profit forecast by 13% on August 4, 2026, and announced a share buyback of up to 1 trillion yen ($6.3 billion), while first-quarter operating profit fell 9% and its shares closed down 1.5%.
The automaker now expects operating profit of 3.4 trillion yen ($21.6 billion) for the current financial year to end-March. Toyota revised its foreign-exchange assumption to 160 yen to the dollar from 150 yen, with the weaker yen reflected in the higher annual forecast.
Toyota also linked the revision to improvements in its marketing efforts and increased sales supported by alternative logistics routes to the Middle East. The company reduced its estimate of the Iran war’s impact to 510 billion yen this fiscal year from 670 billion yen.
That estimate includes higher costs for raw materials such as aluminium, delivery delays, lower sales volumes and support for suppliers. The revised figure remains one of the largest war-related earnings impacts disclosed by a global company to date.
The higher annual outlook contrasts with weaker first-quarter performance. Operating profit declined for a fifth straight quarter and came in below expectations, while global sales fell 3.5% during the quarter.
China sales dropped 28% as slower economic growth and a shift towards domestic electric vehicle brands affected foreign automakers. Middle East sales were down by a third because of the war. In the US, Toyota’s largest market, sales rose by 1%.
Takanori Azuma, chief officer of Toyota’s accounting group, said the company could now transport vehicles overland without passing through the Strait of Hormuz. From September, Toyota expects 25% of exports to the region to be affected, compared with an initial estimate of 50% for the full year.
Toyota raised its annual vehicle shipment target by 100,000 units to 9.7 million, citing solid demand in North America and Europe. Those regions were among the few markets in which the company recorded sales growth during the April-June quarter.
The announced buyback represents up to 4.22% of Toyota’s outstanding stock and is on par with a share repurchase agreement announced three years ago. Toyota also plans to cancel 200 million shares.
The revised outlook does not include the impact of the deadly earthquake that struck Japan’s Kyushu island last week and forced Toyota to halt output at four domestic plants.
Toyota’s revised planning baseline therefore combines a 160 yen exchange-rate assumption, a 510 billion yen estimate for the Iran war’s impact and a 9.7 million vehicle shipment target. Any financial effect from the Kyushu production stoppages remains outside the current forecast.
