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Toyota quadruples April-December profit, ups forecast

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(Globalpost/GlobalPost)

Toyota said Tuesday net profit in the nine months to December quadrupled while it also lifted its full-year earnings outlook, reflecting the car giant's recovery from Japan's 2011 quake-tsunami.

The world's number one automaker credited a sales boost in debt-struck Europe as well as the United States and Asia for the rise, and a weaker yen.

Toyota did not release its latest figures for China, the world's biggest vehicle market, where a diplomatic row between Tokyo and Beijing sparked a consumer boycott of Japanese goods late last year.

But Senior Managing Officer Takahiko Ijichi said that September and October China sales tumbled by about half, although he added: "By December, (sales) recovered to a 20 percent decline from a year earlier."

Toyota previously said it expects to sell 200,000 fewer vehicles in China in the second half of its fiscal year to March and take a 30 billion yen ($325 million) hit to its bottom line. It sold 900,000 vehicles in China in 2011.

The results come after Japan's three biggest automakers -- Toyota, Nissan and Honda -- last month posted record sales for 2012, confirming Toyota had recaptured the title of the world's biggest automaker from US giant General Motors. The Japanese company lost the title in 2011.

On Tuesday, Toyota said it earned 648.2 billion yen from April to December, up from 162.5 billion yen a year earlier, when automakers were pounded by the twin natural disasters which devastated Japan's northeast coast.

The automaker pointed to a weakening yen and cost-cutting for its improved results and upgraded forecast, with operating income soaring to 818.5 billion yen from 117.1 billion yen a year earlier.

The boost "reflects our increased vehicle sales and the progress we are making with our profit-improvement activities", Ijichi said.

Sales in the period jumped 26 percent to 16.2 trillion yen, it said.

The firm also hiked its net profit forecast for the fiscal year through March to 860 billion yen from an earlier estimate of 780 billion yen, on projected revenue of 21.8 trillion yen.

Global vehicle sales in the year were on track to hit 8.85 million units, up from an earlier forecast of 8.75 million units, the automaker said, citing stronger demand in the North American market.

Toyota's results for the three months to December saw net profit rise by nearly one-quarter although the figure fell short of some analysts' expectations. Vehicle sales in Europe and Japan slipped in the quarter.

Japanese firms struggled with a strong yen last year as it made their products less competitive overseas. The unit hit record highs around 75 to the dollar in late 2011, but it has been on a steep slide in recent months with the greenback buying 92.86 yen on Tuesday.

"On the back of the recent depreciation of the yen, Japanese automakers, including Toyota, will enjoy brisk results toward the end of the fiscal year and the early part of the next fiscal year," said Shigeru Matsumura, auto analyst at SMBC Friend Securities.

But "the prospects for sales in China are still uncertain as they are linked to politics, rather than business".

The long-standing row flared up in September when Tokyo nationalised some of a tiny East China Sea archipelago that is also claimed by Beijing, setting off huge demonstrations across China and the consumer boycott.

Japanese factories and businesses across China temporarily closed or scaled back operations over fears of being targeted by angry mobs.

Last week, Honda said that its own nine-month net profit more than doubled although it trimmed its year to March forecast, citing the territorial spat.

Nissan -- which has the most exposure to China among Japan's top-three automakers -- reports its results later this week.

Toyota shares slipped 1.19 percent to 4,540 yen in Tokyo. Its results were published after markets closed on Tuesday.

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http://www.globalpost.com/dispatch/news/afp/130205/toyota-quadruples-april-december-profit-ups-forecast-2