Toyota quadruples first quarter profits after ghastly year
Issued on: Modified:
In a sign of strong recovery, Toyota has announced a $1.5 billion profit for the first quarter of 2012, more than quadruple those of the same quarter in 2011, which was a disastrous year, marred by Japan’s tsunami damage.
AP - Toyota’s January-March profit more than quadrupled to 121 billion yen ($1.5 billion), and the automaker gave upbeat forecasts, marking a solid recovery from a hardship-filled year following the tsunami in Japan.
Toyota Motor Corp.’s profit for the fiscal year ended March plunged 30 percent to 283.6 billion yen ($3.5 billion), down from 408 billion yen the previous fiscal year, as last year’s tsunami damaged supply chains in northeastern Japan and hobbled Toyota production around the world.
But, in a sign of solid recovery, Japan’s No. 1 automaker forecast Wednesday its profit soaring to 760 billion yen ($9.5 billion) for the fiscal year through March 2013.
The annual profit results were better than the company projection for a 200 billion yen ($2.5 billion) profit, as well as the FactSet estimate at 279 billion yen ($3.49 billion).
Toyota’s profit for January-March the previous year had been dismal at 25.4 billion yen because of the tsunami damage. The earthquake and tsunami hit March 11, 2011. The flooding in Thailand at about the same time also hammered Toyota’s results.
Toyota President Akio Toyoda acknowledged the hardships, but also pointed to the strong yen, which erodes the overseas earnings of Japanese exporters like Toyota.
“Our vision is to establish a strong business foundation that will ensure profitability under any kind of difficult business environment,” he said.
“But thanks to the concerted efforts of our employees, suppliers and dealers, we were able to recover production and sales faster than anticipated and achieved a strong result.”
Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, saw its vehicle sales grow in all regions, including Japan, Europe and Africa during the latest fiscal year, except for North America. But even there, it is regaining market share.
Toyota is expecting to sell 8.7 million vehicles for the fiscal year through March 2013, 1.3 million more vehicles than the nearly 7.4 million vehicles sold for the fiscal year ended March.
It is bullish about boosting sales in all key regions, including North America, Europe and Asia, including Japan. In North America, it hopes to sell 478,000 more vehicles in the fiscal year through March 2013, while it hopes to sell 453,000 more vehicles in Asia, excluding Japan.
The rise in gas prices and growing concerns about global warming are major plus factors for Toyota and other Japanese automakers that excel at producing compact fuel-efficient models.
Toyota’s image suffered in North America over a series of massive recalls since 2009, and its U.S. sales fell last fiscal year compared to the previous year. But its sales and market share in the U.S. have almost recovered from what they were a year ago.
“It’s no secret that Toyota had a tough year last year due to the production fallout from the Japanese earthquake. In the last few months though, Toyota has made big strides to regain the U.S. market share it lost to its competitors,” said Edmunds.com senior analyst Jessica Caldwell.
But she warned that Toyota needs to keep coming up with new products to maintain its recovery momentum amid intense competition.
Toyota’s sales for the fiscal year ended March 31 totaled 18.58 trillion yen ($232 billion), down 2 percent from the same period the previous year.
January-March quarterly sales rebounded to 5.7 trillion yen ($71.3 billion), up 23 percent from 4.6 trillion yen the same period the previous year.
The turnaround at Toyota is playing out at other Japanese automakers.
Last month, Honda Motor Co. reported its January-March profit jumped 61 percent on robust car and motorcycle sales, and forecast record global sales of 4.3 million vehicles for this fiscal year.
Nissan Motor Co. reports fiscal results Friday.
Daily newsletterReceive essential international news every morningSubscribe