Toyota (TM.US) Q2 operating profit surged 34%, beating expectations, as strong demand for hybrid vehicles and a weak yen led to another upward revision of its annual profit forecast.

According to JinZhi Finance APP, Toyota (TM.US) announced its fiscal 2027 second quarter results on Thursday. The financial report shows that for the second quarter of fiscal 2027 (July-September 2026), Toyota's revenue reached 13.44 trillion yen, an increase of about 8.6% from 12.38 trillion yen in the same period last year. Operating profit was 1.13 trillion yen, up 34.3% from 839.5 billion yen a year earlier, significantly beating the median forecast of 992 billion yen from nine analysts surveyed by London Stock Exchange Group (LSEG); operating profit margin was 8.4%, compared to 6.8% a year ago. Net profit attributable to the company was 759.4 billion yen, down 18.5% from 932 billion yen in the same period last year.

For the first half of fiscal 2027, revenue was 26.96 trillion yen, up 9.5% year-on-year. Operating profit reached 2.19 trillion yen, up 9.2% year-on-year; net profit attributable to the company was 2.24 trillion yen, up 26.1% year-on-year.

Benefiting from market demand for hybrid vehicles and a weaker yen, Toyota has once again raised its fiscal 2027 profit expectations. On Thursday, Toyota stated that it expects operating profit to reach 3.9 trillion yen (approximately $24.7 billion) for the fiscal year ending March 2027, up from its previous forecast of 3.4 trillion yen.

As the world's largest automaker, Toyota has benefited from strong demand for hybrid vehicles in markets such as the United States, helping to offset declining sales in China—a trend that has persisted for much of this year. Earlier this week, Toyota announced plans to launch the next generation of its popular Corolla model in China. Company executives also hinted that Toyota might introduce a pure electric version of the model, marking a major transformation for the world’s best-selling car. In addition, Toyota is attempting to turn things around by building a new factory in Shanghai, which will begin producing Lexus-branded electric vehicles from the end of 2027.

After the financial results were released, Toyota's Tokyo-listed shares surged, with intraday gains of up to 15%. Before the report, the stock had already risen as much as 8.5% that day due to investor optimism that, with a Democratic sweep in the midterm elections, market expectations for relaxed U.S. President Trump’s tariff policies would improve. Since last year, when Trump raised auto tariffs to 15%, Japanese carmakers have collectively lost tens of billions of yen.

In addition, Toyota expanded its stock buyback program by 300 billion yen to 1.3 trillion yen (approximately $8.2 billion). The maximum number of shares to be repurchased will increase to 610 million, up from the 500 million announced in August. Toyota will launch a tender offer at 2,725 yen per share to buy back its own shares. Mitsui Sumitomo Insurance, Aioi Nissay Dowa Insurance, Tokio Marine & Nichido Fire Insurance, and Sompo Japan Insurance have agreed to participate in the tender offer.