TOKYO – Higher U.S. incentives for Tundra pickups tempered profit growth at Toyota Motor Corp. in the fiscal second quarter, but the company still lifted its full-year earnings forecast.
Overall operating profit edged 2.7 percent higher to 596.7 billion yen ($5.01 billion) in the July-September period, compared with 581 billion yen a year earlier.
The result marked the second-highest quarterly operating profit in Toyotas history, following the record profit of 675.4 billion yen booked in the fiscal first quarter.
Second-quarter consolidated revenue climbed 11.2 percent to 6.49 trillion yen ($57.33 billion).
But in North America, Toyotas biggest market after Japan, second-quarter operating income actually fell 15 percent to 93.9 billion yen ($829 million).
The decline came despite higher regional sales, which advanced to 735,000 vehicles in the second quarter, from 717,000 units the year before.
Toyota, which announced the results here earlier today, blamed the lackluster U.S. profits on higher incentives to move the new Tundra, higher raw material costs and on increased depreciation write downs for three North American facilities that were expanded last year.
The momentum has slowed a bit compared with the first quarter, Senior Managing Director Takeshi Suzuki said. Tundra and other incentive expenses were higher than expected.
Toyota did not release figures for its North American incentives. But Suzuki said sales volume was still increasing and putting the company in position for future profit growth there.
The U.S. sub-prime loan problem is not expected to hurt business, and Toyota is standing by its original full-year sales forecast of 2.99 million units in North America, Suzuki said.
The goal represents a 1.6 percent increase over last year, despite the overall market slump.
Thanks in part to booming sales in Russia, China and other developing markets, Toyota lifted a score of full-year earnings targets on Nov. 7, from its earlier outlook.
Worldwide sales are now seen rising to 8.93 million units in the fiscal year ending March 31, 2008, up 40,000 vehicles from Toyotas previous forecast.
The company meanwhile boosted its full-year net income forecast by 3 percent to 1.7 trillion yen ($15.02 billion) and its annual operating profit prediction by 2.2 percent to 2.3 trillion yen ($20.31 billion).