Japanese automaker Toyota Motor Corp. (TM) has reported disappointing first-quarter financial results as U.S. tariffs negatively impact its business.
Specifically, Toyota announced a 49% decline in its operating profit, missing analysts’ estimates as U.S. tariffs pressured its earnings.
The company announced an operating profit of 569.4 billion yen ($3.63 billion U.S.), which was short of the 813.28 billion yen expected on Wall Street.
Revenue in the period totaled 12.6 trillion yen, which matched the consensus estimate of analysts. Sales were up 2% from the previous year.
Toyota, which is the world’s largest automaker by sales volumes, noted that its operating profit declined for a fourth consecutive quarter due to pressure from U.S. tariffs.
The company’s worldwide vehicle sales fell to 2.29 million from 2.36 million units a year earlier.
In addition to U.S. tariffs, Toyota said that it is facing challenges that include slowing sales in China’s auto market, vehicle recalls, and rising competition in the electric vehicle space.
As such, management lowered their operating income forecast by more than 20% to three trillion yen for the current year, while raising their sales revenue forecast by 0.6%.
Toyota added that its research and development (R&D) expenses are currently at a record high due to certification-related issues and capacity constraints.
The company said it is also continuing to cut costs and reduce wasteful production but that it expects higher expenses from the Iran war and inflation.
TM stock has decreased 13% so far in 2026 to trade at $189 U.S. per share in New York.
