Toyota Q2 Operating Profit Expected to Decline for Fifth Consecutive Quarter
Claire Weston
Toyota's quarterly operating profit is forecast to drop 5% year-on-year to ¥1.11 trillion, marking a fifth consecutive decline; weak sales, rising raw-material costs, and the Kyushu earthquake are putting the full-year profit target under growing pressure.
Five quarters of decline — what is wrong with Toyota's profits?
The median forecast from eight analysts surveyed by LSEG puts fiscal 2026 Q1 (April–June) operating profit at roughly ¥1.11 trillion (about $7.04 billion), down 5% year-on-year.
This means → Toyota is set for a fifth straight quarter of year-on-year profit decline — this is no longer a short-term dip.
In plain terms = one of the world's largest automakers has been earning less than the year before, every quarter, for over a year.
Cars aren't selling — which markets are hit hardest?
Combined Toyota and Lexus global sales fell 3% in Q1 to roughly 2.5 million units.
By region: China plunged 28%, the Middle East dropped roughly a third, Oceania fell 16%, and Central & South America slipped 5%.
CLSA auto analyst Christopher Richter said "the first quarter could be tougher than expected, with sales appearing weaker than anticipated," adding that Oceania and Latin America face aggressive expansion from Chinese brands such as BYD.
Why are costs rising at the same time?
The Middle East conflict, which escalated in late February, has pushed up prices for aluminium and naphtha and disrupted vehicle shipments to the region.
This means → Toyota is being squeezed on both ends — revenue is soft while input costs climb.
On top of that, the best-selling RAV4 is mid-model transition, weighing on U.S. sales; investors will watch management's timeline for new-model volume acceleration.
What new risk does the Kyushu earthquake add?
A strong earthquake struck Japan's Kyushu island last week. Toyota has halted three Kyushu plants through Wednesday and one central-Japan plant through Friday; two of the four are vehicle-assembly facilities.
Supplier Aisin said it "cannot determine" when its damaged factory near the epicenter will resume production; about 200 workers are on-site for recovery.
This reflects deep uncertainty in the supply chain — not just Toyota's own plants are down, but the restart timeline for upstream parts suppliers is equally unclear.
Can the full-year ¥3 trillion profit target survive?
Toyota's standing full-year operating-profit target is ¥3 trillion.
Analysts will focus on whether management revises this figure — earthquake shutdowns, rising raw-material costs, and sliding sales are compounding, making the target harder to reach.
In plain terms = the most important signal from this earnings report is not the backward-looking number but whether management still dares to stand by its full-year profit goal.
Content is for reference only, not financial advice.