UPDATE 2-Toyota halves quarterly profit as Iran crisis hits

Toyota halved its quarterly profit in an earnings ​report on Friday and forecast a decline ​of 20% in the year ‌that ​just started, as rising costs and supply snarls from the Iran war outweighed surging demand for hybrid vehicles. The results from the world's ‌top-selling automaker highlight the lopsided impact of the Middle East crisis, with higher energy prices driving more customers to fuel-efficient cars but not in enough numbers to offset underlying cost pressures.

Toyota halved its quarterly profit in an earnings ​report on Friday and forecast a decline ​of 20% in the year ‌that ​just started, as rising costs and supply snarls from the Iran war outweighed surging demand for hybrid vehicles.

The results from the world's ‌top-selling automaker highlight the lopsided impact of the Middle East crisis, with higher energy prices driving more customers to fuel-efficient cars but not in enough numbers to offset underlying cost pressures. Toyota reported an operating ‌profit of 569.4 billion yen ($3.6 billion) for the three months to March 31, compared ‌with 1.1 trillion yen a year earlier. For the year that just started, it expects an operating profit of 3 trillion yen.

That outlook was well below the 4.59 trillion yen median forecast in an LSEG poll of 23 ⁠analysts. ​Toyota shares declined after the ⁠report and ended down around 2.2% at their lowest close since mid-October. In total, the impact of the Middle East ⁠crisis will be around 670 billion yen in the current financial year, Toyota said.

The latest surge in energy ​prices heaps further pain on an industry already grappling with U.S. tariffs and the ⁠rise of Chinese automakers. Volkswagen CEO Oliver Blume said this week tariffs represent a burden of 5 billion euros ($5.9 billion) a ⁠year ​on the German group's operating profit. Toyota said last week its sales in the Middle East fell sharply in March after shipments to the region were disrupted.

The outlook is the ⁠first issued by Toyota under new CEO Kenta Kon, who assumed his role last month and ⁠faces the challenge of ⁠steering the automaker through the impact of U.S. President Donald Trump's tariffs, which cut operating profit in the year just ended by 1.4 trillion ‌yen. ($1 = 156.8100 yen)

($1 = ‌0.8519 euros)