TOKYO — Toyota Motor Corp. reported a stronger-than-expected quarterly operating profit, shrugging off a firm yen and the damaging impact of flooding in Thailand, and raised its annual forecast, helped by cost cuts and Japanese government subsidies.
Widespread floods in Thailand late last year battered Toyota just as it was recovering from production lost to the earthquake in Japan in March. The floods cost Toyota 240,000 vehicles in lost output worldwide, dragging 2011 global sales down by 6 percent and allowing General Motors Co. and Volkswagen AG to overtake it in global vehicle sales.
The yen's prolonged strength is also weighing on Toyota, which last year built 2.76 million cars in Japan, one third of Japan's total vehicle production. It exported 57 percent of that output, much of it at a loss.
Toyota raised its forecast for operating profit — earnings from its core operations — for the year to end-March to ¥270 billion ($3.52 billion) from a previous ¥200 billion. Consensus forecasts from 23 analysts surveyed by Thomson Reuters are for ¥330.8 billion.
The company, which has a market value of $135 billion — more than rivals Honda Motor Co. Ltd., Nissan Motor Co. Ltd. and Suzuki Motor Corp. combined — now sees annual net profit, which includes earnings made in China, of ¥200 billion, up from the ¥180 billion it projected in early December, before Tokyo announced fresh consumer incentives to buy fuel-efficient cars.
Toyota should benefit significantly from the re-instatement of cash-for-clunkers subsidies and the extension of tax incentives on fuel-efficient cars, especially on hybrids and other cars that use new technologies. Its newest Aqua hybrid received orders equivalent to 10 times the sales target in its first month.
Toyota has forecast a 21 percent jump in sales this calendar year to a record 9.58 million vehicles, including subsidiaries Daihatsu Motor Co. and Hino Motors Ltd. All its production plants, bar Thailand, are back in action.
"It's premature to talk about any (sales) trends by looking only at our performance from last year when we had all those natural disasters," Toyota president Akio Toyoda told reporters last week. "I would want Toyota to be measured on how we do this year, provided it's a peaceful one."
Yen weighs
October-December operating profit jumped 51.1 percent to ¥149.7 billion ($1.95 billion) from a year earlier, well ahead of the average estimate of a small decline to ¥93.9 billion in a poll of nine analysts by Reuters.
Quarterly net profit slipped 13.5 percent to ¥80.9 billion.
Last week, Honda said its profits fell sharply, hit in part by a ¥6 fall in the dollar for the quarter. Nissan, Japan's No.2 automaker, reports on Wednesday.
With the dollar trading at ¥76-¥77, Toyota's Achilles' heel remains its heavy exposure to Japan. It is scrambling to make its domestic factories more efficient to keep its promise of building at least 3 million vehicles a year at home.
A plan to return its Japan-based parent operations to break-even assumes a dollar rate of ¥85. — Reuters
source: gmanetwork.com
