Toyota boosts earnings forecast for current fiscal year
Earthquakes, floods, a strong Japanese yen – just about everything has conspired to hold Toyota Motor Corp. back.
But with the world’s No. 3 automaker recovering from the natural disasters and the North American auto market continuing to strengthen, Toyota on Tuesday raised its earnings forecast for its current fiscal year.
Toyota manufactures the Camry, the best-selling passenger car in America, as well as the Prius hybrid and other models. It also owns the Lexus brand.
The automaker is now forecasting a profit of 200 billion yen ($2.6 billion) for fiscal 2012, which ends March 31. That’s up from a previous forecast of 180 billion yen ($2.3 billion).
Despite the improvement, the prediction still shows that Toyota has work to do before it regains its former profitability. The latest forecast is half the company’s earnings in fiscal 2011 and less than one-eighth its profit in 2008, a record year when the company sold almost 9 million cars worldwide.
Toyota said it expects to sell about 7.4 million vehicles in the current fiscal year.
The carmaker issued its revised outlook while releasing results for its fiscal third quarter.
Hurt by production disruptions caused by the Japanese earthquake in March and then floods in Thailand later in the year, Toyota said its net income fell 13.5% to ¥80.9 billion, or $1.05 billion, in the October-through-December period.
Sales grew modestly, rising 4.1% to 4.865 trillion yen.
One challenge is the strong yen, which Toyota benchmarked at 77 to the dollar for its financial results. The Japanese currency’s strength has made it difficult to make money on cars built in Japan and shipped to North America.
Toyota and others have been building U.S. factories to blunt the negative effects of exchange rates. On Monday, Toyota said it had completed adding a second shift to a factory in Blue Springs, Miss., where it builds the Corolla. That brings employment at the factory to 2,000 workers and will allow the company to produce 150,000 vehicles there annually.
The company also is working to trim expenses throughout its operations to improve profits.
“Toyota remains committed to pursuing an improvement of its earnings structure through various cost reduction activities as well as continuing the production recovery from the Japan earthquake and floods in Thailand,” said Takahiko Ijichi, Toyota’s senior managing officer.
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