News Column

Earnings Toyota UPDATE3

February 4, 2014

TOKYO , Feb. 4 -- ( Kyodo ) _ (EDS: ADDING INFO, CLARIFYING 6TH GRAF) Toyota Motor Corp. revised upward Tuesday its group operating profit projection for fiscal 2013 through March to a record 2.4 trillion yen from an earlier estimated 2.2 trillion yen , boosted by the yen's slide, robust sales in North America and cost-cutting measures. The full-year operating profit estimate eclipses the previous record of 2.27 trillion yen marked in fiscal 2007 before the global financial crisis that erupted in 2008. Japan's top automaker also raised its group net profit estimate for the business year to 1.9 trillion yen , up from the previously projected 1.67 trillion yen , on sales of 25.5 trillion yen , up from 25 trillion yen forecast in November. Toyota benefitted from the yen's depreciation, as its operating profit rises by 40 billion yen for every 1 yen decline against the dollar. The dollar has traded well above the 100 yen line, compared with the company's assumed annual exchange rate of 97 yen set in November. The revised projections assume the dollar will average 100 yen in the full business year. Its global vehicle sales during the April to December period increased 156,000 units from a year earlier to 6.79 million units, on the back of strong demand for the RAV4 sport utility vehicle in North America , where overall sales grew by 97,000 units to 1.96 million units. Aided by the recovering Japanese and U.S. economies, the automaker is now expecting to sell 9.1 million vehicles globally in fiscal 2013, with projected sales of 2.28 million vehicles in Japan and 2.6 million vehicles in North America . "As a general (vehicle) market trend, we are continuing to see a moderate recovery in the United States " and other parts of the world, Managing Officer Takuo Sasaki said at a press conference in Tokyo . The company expects to sell 2.3 million units in the United States in calendar 2014, up from 2.24 million units in 2013. However, Sasaki added that he remains cautious about emerging markets, where financial turmoil has spread since the U.S. Federal Reserve began tapering its quantitative easing measures. "It is hard to predict how the current (unstable financial) conditions will affect each nation's economy," Sasaki said, noting he will be carefully watching for whether the financial turbulence is temporary or prolonged. For the April-December period, the company reported a consolidated operating profit of 1.86 trillion yen , up 126.8 percent from a year earlier, and a group net profit of 1.53 trillion yen , up 135.4 percent. Its sales grew 17.8 percent to 19.12 trillion yen . The company also attributed the robust earnings to its continuing efforts to drive down costs such as by improving productivity at its plants. Asked about possible wage hikes, Sasaki said it would be a matter of course to consider sharing the strong earnings with the company's workers, but declined to elaborate further. The union at Toyota is planning to request a pay-scale hike at the upcoming spring wage talks for the first time since 2009. The automaker's strong earnings indicate a sharp recovery from fiscal 2008, when it incurred an operating loss of 461 billion yen amid a global auto sales slump following the collapse of U.S. investment bank Lehman Brothers Holdings Inc. As for calendar 2013, the company's global group output totaled a record 10.12 million vehicles, making it the world's first automaker to top the 10 million mark. However, in the coming business year through March 2015 , domestic sales are likely to slip due to the sales tax rate hike in April from 5 to 8 percent.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Japan Economic Newswire

Story Tools