Profit forecast is slashed

Toyota Motor Corp. said Thursday that it expected to earn $5.5 billion this fiscal year -- about half of its earlier projection and about a third of the previous year’s profit.

The forecast shows that Japan’s biggest automaker is feeling the effects of a contraction in the vital U.S auto market as well as the credit crunch that has led to big losses at its American rivals.

The company also blamed a surging yen as it slashed its profit forecast for the year ending March 2009. The stronger yen erodes Toyota’s overseas income.

Its profit plunged 69% to $1.4 billion in the July-September quarter. Quarterly sales dropped 8% to $60 billion.

Toyota revised its sales forecast to $232 billion for the year, down 12.5% from the previous year.