Toyota lifts annual forecast on 23% rise in quarterly profit
Strong U.S. sales, soft yen boost earnings
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TOKYO -- Helped by strong sales in the United States and a weaker yen, Toyota Motor Corp. today reported a 23.4 percent year-on-year rise in quarterly net profit and raised its annual profit forecast by more than 10 percent.
Toyota, in a statement, said net income for the year ending in March will probably reach a five-year high of 860 billion yen ($9.3 billion), exceeding the previous 780 billion yen forecast. The automaker raised its estimate for operating income by 9.5 percent and revenue by 2.3 percent.
Toyota posted a net profit of 99.9 billion yen for the three months to Dec. 31, up 23.4 percent from a year ago when it struggled after natural disasters disrupted its supply chain. Operating profit declined to 124.7 billion yen in the quarter. Revenue rose to 5.32 trillion yen.
N.A. loss
The company posted a quarterly operating loss from North America of 17.1 billion yen, citing legal fees. The company said in late December it will pay more than $1 billion to U.S. consumers claiming their vehicles dropped in value because of recalls, and reflect the charge during the fiscal third quarter.
U.S. deliveries of Toyota, Lexus and Scion models increased 13.5 percent last quarter, outpacing the industry's growth as demand rose for the Camry sedan and Prius hybrid, according to data compiled by industry researcher Autodata Corp. Toyota today said it aims to sell 2.2 million vehicles in the United States in 2013, compared with 2.08 million last year.
Europe, Japan
In Europe, Toyota's operating profit for the quarter fell to 9.2 billion yen, from 10.4 billion yen a year earlier. Europe's car market is forecast to drop to 12.3 million vehicles this year, 23 percent below the pre-crisis peak of 2007, according to IHS Automotive.
In Japan, Toyota generated profit from its home market for a fourth straight quarter after eight consecutive periods of losses. It earned operating income of 15.6 billion yen. Deliveries in the country dropped 5.1 percent last quarter after government subsidies for fuel-efficient cars expired in September. The Japanese auto market will probably shrink 11.7 percent in 2013 after surging 27.5 percent, according to the Japan Automobile Manufacturers Association, as government subsidies expired in September.
China market
In other Asian markets, Toyota's profit climbed to 91.7 billion yen, compared with the 91.4 billion yen average estimate. Toyota's sales in China fell 4.9 percent last year, the first annual drop for the carmaker based on company figures stretching back to 2002.
The company is expecting deliveries to rise about 7 percent to 900,000 vehicles in the market this year. That's slower than the 8.5 percent growth projected by the China Association of Automobile Manufacturers for the country's passenger-vehicle market.
Weaker yen
Toyota is being helped in its export markets by the weaker yen, whose 14 percent drop since Nov. 13 is making everything from Japanese cars to vacuum cleaners more competitive in the United States and Europe.
"The weaker yen will allow Japanese carmakers to price their vehicles at a more competitive level, and this will help improve sales of cars in the premium segment like the Lexus," said Koichi Sugimoto, a Tokyo-based auto analyst at BNP Paribas. "If things go well, Japanese carmakers may boost their market share in the U.S. to as much as 40 percent."
The yen began tumbling in November as Prime Minister Shinzo Abe called for "bold monetary policy" to beat deflation and drive down the value of the yen.
Among Japan's big three automakers Toyota, Nissan Motor Co. and Honda Motor Co., analysts see top seller Toyota as the most likely to benefit from a weakening yen because it has the highest ratio of production in Japan, more than half of which it exports.
Industry lead
Toyota outsold General Motors Co. and Volkswagen globally last year, regaining the industry sales lead after ceding it to GM in 2011. In 2013, Toyota expects to sell 8.9 million vehicles globally.
Across the group, which includes Daihatsu Motor Co. and Hino Motors Ltd., it forecasts shipping 9.91 million vehicles. Last year, the company sold a record 8.72 million vehicles around the world. Its groupwide sales were also a record high of 9.75 million vehicles.
The brightening outlook for Japan's biggest company is spreading to its supply chain. Denso Corp., Toyota's biggest supplier, last week raised its profit forecast 16 percent to a five-year high. Toyota Boshoku Corp., Tokai Rika Co., Koito Manufacturing Co., Aisin Seiki Co. and Toyoda Gosei Co. also increased their earnings projections in the past week.
Hyundai, Kia suffer
Such optimism comes at the expense of companies in Korea, where the won strengthened 4.4 percent against the dollar last quarter, more than any other major Asian currency, according to data compiled by Bloomberg. Hyundai Motor Co. and smaller affiliate Kia Motors Corp. both reported quarterly profit declines last month and expressed concerns about worsening exchange rates.
The reversal of fortunes is evident in the U.S. market, where Hyundai's market share has dropped in three out of the past four months to the lowest since December 2011, according to data compiled by Bloomberg Industries. By contrast, Toyota's share has risen for two straight months to the highest since May 2012.
Bloomberg and Reuters contributed to this report
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