TM · Toyota Motor Corporation

Toyota Motor Corporation's FY2026 results showed revenue growth of 5.5% to 50,684.9 billion yen, driven by a 2.5% increase in global consolidated vehicle sales to 9,595 thousand units, with Japan up 4.6% and overseas up 1.9%. However, operating income declined sharply by 21.5% to 3,766.2 billion yen, primarily due to a 1,380 billion yen negative impact from U.S. tariffs, higher expenses (including R&D, labor, and depreciation), partially offset by marketing efforts (+710 billion yen) and other factors. The automotive segment saw revenues rise 5.1% but operating income drop 29.5% due to expense increases, while financial services operating income grew 24.6% on U.S. swap valuation gains. Japan operating income fell 26.3%, reflecting regional pressures. Net income attributable to Toyota decreased 19.2% to 3,848.0 billion yen, with EPS at 295.25 yen. Balance sheet strengthened with total assets at 105,522.3 billion yen and shareholders' equity at 41,020.1 billion yen. Operating cash flow improved to 5,472.9 billion yen. For FY2027, Toyota forecasts modest revenue growth to 51,000 billion yen but operating income down 20.3% to 3,000 billion yen, citing inability to fully absorb new Middle East impacts (-400 billion yen), higher expenses, and deconsolidation effects, despite cost reductions and forex tailwinds. Management emphasizes business structure transformation for resilience amid tariffs, forex, and geopolitical risks. Shareholder returns remain stable with FY2026 dividend at 95 yen (payout ratio 32.1%) and FY2027 at 100 yen, alongside flexible share repurchases and treasury stock disposition to executives under restricted stock plan to align incentives.