Toyota Motor Corp reported a stronger-than-expected quarterly operating profit and raised its annual forecast on 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 per cent and allowing General Motors Co and Volkswagen AG to overtake it in global vehicle sales.
Toyota now expects operating profit - earnings from its core operations - for the year to end-March of 270 billion yen (€2.7 billion), up from a previous 200 billion yen. Consensus forecasts from 23 analysts surveyed by Thomson Reuters are for 331 billion yen. Operating profit last year was 468 billion yen.
Toshiyuki Kanayama, senior market analyst at Monex Securities, said the revised profit guidance was a bit of a disappointment. "But the market is looking at the next financial year. The key for Toyota shares will be whether profit (next year) will rise to around 800 billion yen."
Toyota, which has a market value of $135 billion - more than rivals Honda Motor Co, Nissan Motor Co and Suzuki Motor Corp combined - now sees annual net profit, which includes earnings made in China, of 200 billion yen, up from the 180 billion yen it projected in early December.
Takahiko Ijichi, senior managing officer, told a news conference Toyota aimed to sell at least 1 million vehicles in China this year, up from 800,000 in 2011.
October-December operating profit jumped 51.1 per cent to 149.7 billion yen from a year earlier, well ahead of the average estimate of a small decline to 93.9 billion yen in a poll of nine analysts by Reuters.
Quarterly net profit slid 13.5 per cent to 80.9 billion yen.
Asked about intensifying competition in North America, where Toyota reaffirmed its forecast for annual sales of 1.9 million vehicles, Ijichi later told reporters: "The Big Three (Ford Motor Co, General Motors and Chrysler Group) have improved their financial standing quite a bit, partly thanks to support from the government.
"Their cars are also getting better, and in that sense the competitive landscape has gotten a lot tougher... Korean brands are also pushing hard, so, for Toyota and Japanese brands, it's a very tough race," he said.
"But that's why we're gearing up with new models, particularly fuel-efficient ones, to recover lost ground," he added, noting Toyota plans to launch 19 new or refreshed models in the United States this year.
The yen's prolonged strength is weighing on Toyota, which last year built 2.76 million cars in Japan, one third of Japan's total vehicle production. It exported 57 per cent of that output, much of it at a loss.
At home, Toyota should benefit 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 per cent jump in sales this calendar year to a record 9.58 million vehicles, including subsidiaries Daihatsu Motor Co and Hino Motors. 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."
Reuters
