TOKYO — Toyota Motor Corp. racked up record results for the fiscal year that ended March 31, but the good news ends there.
The world's biggest and most profitable car company is warning that earnings in the current year will fall for the first time in nine years.
What's more, Toyota backed off its optimistic outlook for a 2008 sales increase in North America. A top executive now says his company's volume is likely to decline.
That would be a dramatic reversal from the year that ended March 31. Sales, operating profit and net income set records, President Katsuaki Watanabe said last week.
Revenues rose 9.8 percent to 26.29 trillion ($230.60 billion). Operating profit rose 1.4 percent to 2.27 trillion ($19.91 billion). And net income advanced 4.5 percent to 1.72 trillion ($15.07 billion). All those results were company records.
But Toyota finds itself buffeted by a triple whammy of outside forces: an unraveling U.S. market, surging raw material prices and a Japanese yen that is rising against the dollar.
“The business environment surrounding us has changed very rapidly to become tougher,” Watanabe said here.
Toyota says operating profit will tumble 29.5 percent to 1.60 trillion ($16.00 billion) in the current fiscal year. That would be the first decline in operating profit in nine years.
Toyota missed its North America sales goal of 2.97 million units in the fiscal year just ended, selling 2.96 million. This year, it sees a 6.4 percent drop to 2.77 million.
For the 2008 calendar year, Toyota had been predicting a 1 percent sales increase to 2.64 million light vehicles in the United States, despite the deteriorating market.
But that, too, is under pressure, said Senior Managing Director Takeshi Suzuki.
“We are thinking it's going to decline a little,” Suzuki said after the financial results were released. “We are now examining the sales plan and will announce the figures soon.”
Toyota is struggling with record inventory levels in the United States, largely because it misjudged how bad the U.S. market downturn would be. Suzuki said the company had predicted total volume in the high 15 millions but was now working with the low 15 millions. c