Toyota quarterly profit triples, raises forecast

Nov 05, 2012 by Yuri Kageyama
A couple walk by Lexus models displayed at a Toyota Motor Corp. showroom in Tokyo Monday, Nov. 5, 2012. Toyota's quarterly profit tripled, driven by a recovery from natural disasters, and the company raised its full-year earnings forecast despite a sales slump in China. (AP Photo/Koji Sasahara)

(AP)—Toyota's quarterly profit tripled, driven by a recovery from natural disasters, and the company raised its full-year earnings forecast Monday despite a sales slump in China.

., on track to regain the crown of world's No. 1 automaker this year, reported a July-September net profit of 257.9 billion yen ($3.2 billion) compared with an 80.4 billion profit a year earlier. The result was better than the 238 billion yen ($3 billion) quarterly profit forecast by analysts surveyed by FactSet.

Japan's top automaker raised its profit forecast for the full fiscal year through March 2013 to 780 billion yen ($9.8 billion) from 760 billion yen ($9.5 billion).

It had a profit of 283.5 billion yen the previous fiscal year when Toyota's car production was hammered by the tsunami disaster in northeastern Japan and flooding in Thailand.

The company's optimism comes despite a plunge in China, where a territorial dispute over tiny islands known as Senkaku in Japan and Diaoyu in China has set off protests and a boycott of Japanese cars in recent months.

Quarterly sales improved 18 percent to 5.4 trillion yen ($67.6 billion) as the demand for Toyota vehicles picked up across all major regions, including North America, Europe, Japan and Asian nations other than China.

Executive Vice President Satoshi Ozawa said Toyota had recovered from last year's disaster-related parts shortages and was able to boost profits despite the disadvantage of a strong yen. A strong yen erodes the value of overseas earnings of such as Toyota.

"We have revised the forecast we announced at the end of the first quarter to reflect the progress we have been making," Ozawa said.

For the fiscal second quarter, Toyota, which makes the Camry sedan, Prius hybrid and Lexus luxury models, sold 2.2 million vehicles around the world, up from 1.8 million the same period the previous year.

It now expects to sell 8.75 million vehicles for the full business year through March 2013, up by more than a million vehicles compared to the 7.35 million vehicles sold the previous year.

A man inspects an "Aqua" at a Toyota Motor Corp. showroom in Tokyo Monday, Nov. 5, 2012. Toyota's quarterly profit tripled, driven by a recovery from natural disasters, and the company raised its full-year earnings forecast despite a sales slump in China. (AP Photo/Koji Sasahara)

But the latest projection is 50,000 vehicles fewer than the 8.8 million vehicles Toyota projected in August. Toyota said the drop comes from the sales slump in China, as well as Europe.

Toyota's vehicle sales in China dropped to about half of last year's levels in September to 44,100 vehicles from 86,000 the year before. In August, Toyota sold 75,280 vehicles in China, down 15 percent.

Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, had planned to sell 1 million vehicles in China this calendar year. Now, it says it expects to sell about 850,000 vehicles this year because of the anti-Japanese sentiments.

The China effect is expected to erase 30 billion yen ($375 million) from net profit for the year through March 2013, Toyota said.

Still, Toyota has widened its lead over General Motors Co. in global vehicle sales, selling 7.4 million vehicles around the world through September, and 450,000 more than General Motors, which says it sold 6.95 million cars and trucks.

GM was the top-selling automaker for more than seven decades before losing the title to Toyota in 2008. Last year, Toyota sank to No. 3 after GM and Volkswagen AG of Germany, as it got hit with the earthquake and tsunami in northeastern Japan and the Thai floods later that year.

Although Toyota lost 20 billion yen ($250 million) in operating profit from an unfavorable exchange rate, it gained 160 billion yen ($2 billion) through cost-reduction efforts during the latest quarter, the company said.

Nomura Securities Co. auto analyst Masataka Kunugimoto said in a report last month the damage to Toyota's bottom line from the sales decline in China would be small as Toyota gains sales in other markets such as North America, Southeast Asia and Brazil.

"Profits are expected to expand further," he said.

Other Japanese automakers are also recovering but suffering the sales drop.

Honda Motor Co.'s surged 36 percent, and it raised its sales forecast to 4.1 million vehicles for the year through March 2013, down about 180,000 from the earlier forecast of 4.3 million. Honda lowered its profit forecast to 375 billion yen ($4.7 billion) for the full fiscal year from 470 billion yen ($5.9 billion). The new forecast still represents a 78 percent rebound.

Nissan Motor Co., allied with Renault SA of France, reports earnings Tuesday.

Toyota stock gained 2 percent to 3,210 yen ($40) in Tokyo trading.

Explore further: SK Hynix posts near 30% drop in Q2 net profit

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Japan's Fujitsu hit by third-quarter loss

Jan 31, 2012

Japanese high-tech giant Fujitsu plunged into a net loss for the three months to December, it said Tuesday, as it slashed its full-year sales and profit forecast.

Japan's Fujitsu says posts 16% fall in Q1 profit

Jul 27, 2012

Japanese high-tech giant Fujitsu on Friday said its first quarter net loss widened and cut its sales forecast for the fiscal year as it was hit by weaker demand and a strong yen.

Canon profit drops, cuts forecasts due to tsunami

Apr 26, 2011

(AP) -- Canon said its first quarter profit dropped slightly on costs from an acquisition and Tuesday warned that full year earnings would take a hit from disrupted production due to Japan's earthquake and tsunami.

Sharp annual profit more than quadruples

Apr 27, 2011

(AP) -- Sharp said its annual profit more than quadrupled due to brisk demand for liquid crystal display screens but warned the earthquake and tsunami that hit Japan last month will have a "broad" impact on its business.

Japan's NEC revises up profit forecast

Oct 19, 2012

Japanese information technology firm NEC said Friday it has revised its half year forecast from a loss to a healthy net profit, with reports saying demand for iPhones was helping the company.

Panasonic returns to profit in 1Q on cost cutting

Jul 31, 2012

(AP) — Panasonic Corp. said Tuesday it returned to the black in the April-June quarter, logging a net profit of 12.8 billion ($163 million) mainly on lower costs after cutting more than 38,000 jobs over ...

Recommended for you

Nokia profits rise after sale of handset division

9 hours ago

(AP)—Telecommunications and wireless equipment maker Nokia Corp. saw its shares surge on Thursday after it reported higher profits and an improved earnings outlook in the wake of its sale to Microsoft of its troubled handset ...

Swiss drug maker Roche posts 7 percent profit drop

12 hours ago

(AP)—Swiss drugmaker Roche Holding AG on Thursday posted a net profit drop of 7 percent compared with a year ago, weighed down by a strong Swiss franc and charges from one of its diagnostic units.

Cheaper wireless plans cut into AT&T 2Q profit

23 hours ago

(AP)—AT&T Inc. on Wednesday posted lower net income for the latest quarter due to cheaper cellphone plans it introduced as a response to aggressive pricing from smaller competitor T-Mobile US.

Facebook 2Q earnings, revenue soar (Update)

23 hours ago

(AP)—Facebook is on a roll. The world's largest online social network posted sharply higher earnings on Wednesday as revenue from mobile advertising continued to grow, and more people used it, more often.

User comments : 0