The second half outlook is less cloudy for Japan's largest automaker.
Toyota Motor Corporation (TMC) in Japan today said that operating income decreased from ¥211.6 billion to a loss of ¥108 billion (-$1.4 billion), while income before income taxes was a loss of ¥80.5 billion. This was Toyota’s first quarterly loss in two years as net income decreased from ¥190.4 billion to a just barely profitable ¥1.1 billion. Operating income decreased by ¥319.6 billion for the first quarter of FY 2011.
Major factors contributing to the loss include the negative effects of marketing activities of ¥280.0 billion yen in an attempt to burnish a recall and poor quality images. Also currency fluctuations of ¥50.0 billion hurt results. The Japanese Yen currently trading at ¥77:$1 remains a threat to the profitability of all export-oriented Japanese firms, including Japan’s largest automaker, Toyota, which is heavily dependent on the U.S. market.
TMC Senior Managing Officer Takahiko Ijichi said: “In Japan and North America where the effects of the earthquake were particularly serious, vehicle sales declined buy accutane substantially. In the Asia region, despite the impact of the earthquake, we were able to maintain a similar level of vehicle sales as the previous year in countries led by Indonesia.
However, TMC revised its forecast for vehicle sales for the full fiscal year ending March 31, 2012 from 7.24 million to 7.6 million, an increase of 360,000 from TMC’s June forecast, which means a strong comeback is expected in the second half of the year. Toyota is in a race against General Motors and Volkswagen to be the world’s largest automaker.
TMC also revised its consolidated financial forecasts for fiscal year 2012 to consolidated net revenues of ¥19,000 billion, operating income of ¥450 billion, income before income taxes of ¥500 billion and net income of ¥390 billion.
“The Yen has been further appreciating against major currencies lately” said Ijichi. However, Toyota remains committed to pursuing an improvement of its earnings structure globally through cost reduction activities in which it has strong track record, and to utilizing every opportunity to increase production and sales outlook.”
