Toyota profit plunges by half but ups guidance

Japanese car giant Toyota announced a plunge in profits on Tuesday, but said the year might not be quite as bad as previously expected as the world's number three automaker upped its forecasts. The company said its nine-month net profit fell 57.5 percent to 162 billion yen ($2.12 billion), blaming the continued impact of the March 11 disaster, Thai floods and a strong yen. Toyota said operating profit also slumped by 72.3 percent to 117 billion yen in the nine months to December, with revenue down more than 10 percent to 12.88 trillion yen on year. But Japan's biggest automaker raised its full-year profit forecast to 200 billion yen, up 11.1 percent from the outlook it released in December, and its operating profit outlook to 270 billion yen from 200 billion yen. The maker of the Prius hybrid and Lexus said it expected to sell 7.41 million units worldwide in the year to March, 30,000 units more than its December forecast, and to post 18.30 trillion yen in revenue. "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 Toyota senior managing officer Takahiko Ijichi in a statement. Even if realised, the forecast figure for the full year's net profit would still be less than half that of the previous year. As its recovery from a trying year gains pace and production normalises, Toyota is looking to win back customers with new fuel-efficient vehicles. Observers said the forecast upgrade may be thanks in part to the US economy picking up at a faster pace than expected, citing recent better-than-forecast jobs data. "Toyota must have expected demand to return after the earthquake and Thai floods, but I suppose it is recovering more quickly than the automaker had thought," said Tatsuya Mizuno of Mizuno Credit Advisory. In the three months to December, the company saw sales grow 4.1 percent to 4.87 trillion yen year on year, while operating profit jumped 51.1 percent to 149.68 billion yen. Net profit for the latest quarter shrank 13.5 percent to 80.94 billion yen from the previous year. Mizuno said the high level of the Japanese currency would continue to be a headache for the company, and one that was difficult to predict. "It is concerning that the yen is higher against not only the dollar but also euro," he said. Toyota confirmed last month that its world group sales fell below the eight million mark in 2011, losing the firm its number one spot in the global carmakers' league. Total sales were 7.95 million units worldwide, down six percent, Toyota said, after supply chains were disrupted by the earthquake and tsunami in Japan, as well as flooding in Thailand. The company had been the world's biggest carmaker since 2008 and sold 8.42 million vehicles in 2010. But its 2011 figure leaves US giant General Motors, on 9.03 million sales, back in top spot after it emerged from bankruptcy, with Germany's Volkswagen in second place on 8.16 million vehicles.