http://www.detnews.com/apps/pbcs.dll/article?AID=/20070803/UPDATE/708030420Toyota's quarter profit jumps record 32 percent
Yuri Kageyama / Associated Press
TOKYO -- Toyota, on track to overtake General Motors as the world's biggest automaker this year, said Friday its April-June profit jumped 32.3 percent to a record high for a quarter, lifted by strong overseas sales and a weaker yen.
Surging gas prices have proved a big plus for the Japanese automaker, as drivers flock to Toyota's fuel-efficient models, including the Camry, the best-selling model in the U.S., and the Prius gas-electric hybrid.
"The results are fantastic," said Tsuyoshi Mochimaru, auto analyst with Lehman Brothers in Japan.
Foreign sales are going strong, and the weak yen, which raises the value of overseas earnings when converted into yen, is making rosy earnings even rosier as Toyota's exports grow, Mochimaru said.
Group net profit at Toyota, which also makes the Lexus luxury model and compact Corolla, totaled 491.54 billion yen ($4.1 billion) for the quarter through June, up from 371.50 billion yen the same period the previous year.
Quarterly sales rose 15.7 percent on year to a record 6.523 trillion yen, or $54.7 billion. At current exchange rates, that's more than General Motors Corp.'s record quarterly sales of $54.5 billion, which the Detroit automaker marked in the second quarter of 2006.
But Toyota kept what some analysts say is a conservative forecast for the full fiscal year through March 2008, projecting net profit to inch up just 0.4 percent to 1.65 trillion yen ($13.85 billion) on sales of 25 trillion yen ($209.78 billion).
It also kept its vehicle sales target for the full fiscal year the same at 8.89 million vehicles.
"We posted substantial increases in both revenue and profit, our highest ever quarterly results," said Toyota Senior Managing Director Takeshi Suzuki.
Toyota has already surpassed General Motors in global vehicle sales for the first half of the calendar year, selling 4.72 million vehicle to GM's 4.67 million. Many analysts believe Toyota will likely beat GM for the full year in both sales and production.
The title of world's biggest automaker -- which GM has held for 76 years -- typically is determined by annual global vehicle production numbers. For the first six months of the year, Toyota and its group companies made 4.71 million vehicles worldwide, while GM estimates that it made 4.75 million vehicles during the period.
For the calendar year, Toyota is projecting global sales of 9.34 million vehicles. GM does not give full-year projections, but sold about 9.1 million vehicles in 2006.
GM, meanwhile, has been battling back from losing money in recent years.
Earlier this week, the Detroit-based company reported its third straight quarter of black ink, earning $891 million on the back of strenuous restructuring efforts.
Toyota said sluggish domestic vehicle sales were offset by greater demand in North America, Europe and the rest of Asia.
But even in Japan, operating profit improved because of solid demand for the Lexus, a model that brings in more profit per car than cheaper models, it said.
In North America, a market that's proving tough recently, Toyota sold 762,000 vehicles in the April-June period, an increase of 15,000 vehicles from the same period the previous year, on the successful launch of the Tundra truck and Lexus LS.
The yen's relative weakness against the dollar added 100 billion yen ($839.1 million) to Toyota's bottom line.
Cost reduction efforts offset the damage from higher costs of raw materials, the company said.
Like other Japanese automakers, Toyota was hurt by a temporary closure of a key parts maker in northwestern Japan, which was hit by a 6.8 magnitude earthquake that killed 11 people last month. But Toyota says it can make up for the production loss by the end of the year.
Toyota shares inched up 0.1 percent to 7,080 yen ($59.41). The results were announced shortly before the market closed.
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Toyota first quarter jumps on sales rise, yen; keeps forecast
Reuters |
August 3, 2007
TOKYO (Reuters) -- Toyota Motor Corp.'s quarterly operating profit rose by a better-than-expected 32 percent as brisk European and North American sales combined with a softer yen to make up for chronic weakness in domestic demand.
Toyota, the world's biggest and most profitable automaker, left its cautious annual forecasts unchanged as expected.
The Japanese firm, valued at $215 billion -- more than 10 times the market capitalization of U.S. rival General Motors -- is on its way to a seventh straight year of record earnings, powered by a rapid expansion into developing markets such as China and Russia.
It is also cranking up market share in mature regions such as North America and Europe with the Prius hybrid, RAV4 crossover and other fuel-efficient cars.
The carmaker said forex gains contributed 100 billion yen to its quarterly profit growth.
"The weak yen seems to have made a considerable boost to its earnings. The outlook is a bit uncertain given that the yen is on an uptrend and car sales in the United States are being impacted by high gasoline prices," said Kiyoshi Yamanaka, portfolio manager at T&D Asset Management.
Its sales drive helped the Toyota group, which includes Daihatsu Motor Co. and truck maker Hino Motors Ltd., end GM's 75-year reign as the world's biggest automaker in 2006. It outsold the struggling Detroit behemoth by 128,000 units last year, according to Automotive News Data Center.
Toyota's lean operations and cost-cutting savvy have enabled it to absorb a stubborn rise in commodity prices.
Although it spends heavily to develop next-generation environmental and safety technologies, Toyota has the highest operating margin in the global auto industry at nearly 10 percent of sales.
Toyota's operating profit for the April-June first quarter was 675.43 billion yen ($5.67 billion), up 32 percent and ahead of a consensus estimate of 612.4 billion yen in a poll of six brokerages by Reuters Estimates.
Net profit also soared 32 percent to 491.54 billion yen while revenue grew 15.7 percent to 6.52 trillion yen.
Toyota said foreign exchange gains contributed 100 billion yen to operating profits in the quarter. It kept its assumptions for the yen at 115 per dollar and 150 per euro.
Toyota kept its operating and net forecasts at 2.25 trillion yen and 1.65 trillion yen, respectively, for the year to end-March 2008. Consensus forecasts are for 2.45 trillion yen and 1.77 trillion yen.
Analysts also say Toyota is taking steps to spread out its source of earnings to rely less on North America through rapid growth in Europe and Asia.
That's important as sales growth in the United States inevitably slows down from the heady rate of the past few years. Last month, Toyota's U.S. sales fell for the first time in almost three years, mainly due to a high base the year before.
"A lot depends on the U.S. economy. Right now there are problems in the housing market, and we're hearing about an economic decline," said Shigemi Nonaka, special adviser at Polestar Investment Management. "But in terms of the stock price, Toyota looks cheap right now."
Domestic rival Honda Motor Co. last week also reported a sharp rise in quarterly profits fuelled by better sales, and lifted its full-year forecasts to reflect a softer-than-expected yen.
Japan's third-ranked Nissan Motor Co., meanwhile, had a worse-than-expected drop in profits as sales of bigger vehicles tanked in the United States due to high pump prices.
In the three months to June 30, Toyota shares gained 3.3 percent to 7,800 yen, trailing Tokyo's transport sector subindex, which rose 5.8 percent. They have since lost another 9 percent, again underperforming the sector.
Prior to the earnings announcement, Toyota shares closed up 0.1 percent at 7,080 yen, just 2 percent above a year-to-date low of 6,950 yen hit in the previous session.
