The Japanese company, the world’s largest automaker, will probably see a record semiannual profit when it reports its fiances tomorrow, as the weaker yen buoyed the value of exported Japanese cars.
Net income in the fiscal first half ended Sept. 30 jumped 74 % to 955.3 billion yen ($9.7 billion), according to the average of five analyst forecasts compiled by Bloomberg. For the quarter, profit probably climbed to 444.7 billion yen, more than the combined earnings of General Motors and Volkswagen.
“The weaker yen and cost-cutting efforts are the two major factors explaining the surge in domestic profit,” said Yusuke Miura, an analyst at Tokai Tokyo Securities Co. “Toyota will probably continue to be good for the time being if the yen stays at the current level and cost-cutting efforts are executed continuously.”
Toyota’s shares have surged 58 % this year, outperforming Honda and Nissan. The Nikkei 225 Stock Average has only risen 37 % in 2013. The company now forecasts profit of 1.48 trillion yen for the 12 months ending March 31, based on a level of 92 yen to the dollar and 122 yen to the euro.
Behind Toyota’s earnings spree is the yen, which has dropped against all major currencies in the past year, lifting the country’s exporters and reviving an economy that’s been through three recessions in five years. Japan’s biggest company is on pace to outsell all other carmakers for the second straight year.