Toyota stock surges as hybrid sales, weaker yen boost profit forecast

Toyota ( TM ) stock is jumping on the back of a guidance raise, as the Japanese auto giant shows its hybrid bet is paying off.

The world's largest automaker reported fiscal Q2 profit fell 19% from a year ago; however, the company raised its full-year operating income forecast to 3.9 trillion yen ($24.7 billion) from 3.4 trillion ($21.5 billion), citing strong sales in select regions and cost-cutting efforts.

"In addition to reduced tariff-related costs, through the accumulation of improvement efforts, including the expansion of value chain earnings, we expect year-on-year profit growth, and have revised our forecast upward," Toyota Accounting Group Chief Officer Takanori Azuma said in a presentation.

Toyota stock jumped over 9% in New York, its biggest one-day move since July of last year, when the stock rose over 13% on news that the US and Japan reached a trade deal on auto tariffs. Toyota shares listed in Tokyo soared 17%, its biggest one-day move since 1987, per Bloomberg .

Toyota also benefits from a weaker yen, which gave it a forex boost of 685 billion yen ($4.3 billion) in the first half of the fiscal year.

While regions like China suffered, Japan and North America grew or maintained their existing sales levels. In the US, hybrid offerings like the Camry and RAV4 SUV remained popular. Last month, Toyota reported its "electrified" vehicle sales (which include both hybrids and EVs) jumped 28.5% to 363K units, representing 57.4% of total sales volume.

"North America returned to profitability largely due to price revisions and the reduced impact of U.S. tariffs," Azuma said.

The gains are expected to continue, with Toyota forecasting North America market share of HEV (hybrid electric vehicles) rising to 15.6% from 12.7%, whereas pure EV share is expected to drop to 5.8% from 7.8%.

Toyota also expanded its buyback program to up to 1.3 trillion yen ($8.2 billion), targeting 14 trillion yen ($88.7 billion) in shareholder returns over the next 5 years.

Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram .