Toyota Profit Rises on Overseas Car Sales, Weaker Yen
By Naoko Fujimura and Tetsuya Komatsu
Nov. 7 (Bloomberg) -- Toyota Motor Corp., the world's second-largest automaker, said second-quarter profit rose 11 percent, boosted by a weaker yen and higher sales of Camry sedans in Europe and Asia. It raised the full-year forecast.
Net income totaled 450.9 billion yen ($4 billion) in the three months ended Sept. 30, compared with 405.7 billion yen a year earlier, the Toyota City, Japan-based carmaker said in a release today. That was more than the 444.4 billion yen average estimate of six analysts compiled by Bloomberg. Sales rose to 6.49 trillion yen from 5.83 trillion yen.
The carmaker's operating profit in Asia more than doubled in the quarter, offsetting lower earnings in Japan and North America. The profit gain may help Toyota shares recover from the biggest quarterly decline in more than four years as demand in Russia and China offsets slumping domestic sales.
``Growth in emerging markets is enough to offset concerns from a slowdown in U.S. consumer spending,'' said Masaki Iso, who oversees about $7.3 billion as head of Japanese equities at Yasuda Asset Management Co. in Tokyo. ``Rising oil prices will serve as a tailwind.''
Thailand, Indonesia
The company has expanded production of pickups, minivans and sport-utility vehicles in Thailand, Indonesia, Argentina and South Africa. The four countries are manufacturing bases for vehicles that are sold in more than 140 countries.
Toyota raised its net income forecast for the year ending March 31 to 1.7 trillion yen from 1.65 trillion yen previously. Sales will likely total 25.5 trillion yen, with operating profit expected to be 2.3 trillion yen, the company said.
By comparison, General Motors Corp., the world's largest automaker, will probably report its biggest-ever quarterly loss today after it writes down $39 billion of future tax benefits.
``Toyota is always very conservative,'' said Edwin Merner, who oversees $1 billion as president of Atlantis Investment Research Corp. in Tokyo.
Operating profit in Asia rose to 67.1 billion yen in the quarter compared with 31.3 billion yen. Operating profit in North America slipped 15 percent in the quarter and Japan's operating profit fell by 3.8 percent, according to the company.
``Asia is becoming a new pillar for our profitability,'' said Toyota Senior Managing Director Takeshi Suzuki in Tokyo.
Vehicle sales in Asia rose 22 percent in the quarter and sales in the Middle East jumped 19 percent. The company's domestic sales declined 4.5 percent.
Shares Decline
Toyota's shares declined 13 percent in the quarter, the biggest drop since the three months ended March 31, 2003. They rose 0.8 percent to 6,440 yen in Tokyo today, before the earnings announcement.
Second-quarter operating profit, or sales minus the cost of goods sold and selling, general and administrative expenses, totaled 596.7 billion yen, the company said.
Toyota's global sales to dealers rose 4 percent to 2.14 million vehicles in the second quarter. Sales in Europe surged 7.5 percent to 302,000.
The automaker is opening a factory in Russia to make Camrys to raise sales in a country where average wages have increased at an annual pace of more than 6 percent every month since January 2005. Global demand for crude oil and natural gas has fueled Russia's economic growth.
Gasoline Prices
The price of gasoline averaged $3.02 a gallon yesterday in the U.S. after reaching a peak of $3.23 a gallon in May, according to AAA, the U.S. drivers group. Toyota's sales of the Prius surged 51 percent, and those of the RAV4 sport-utility vehicle jumped 31 percent last month, according to Woodcliff Lake, New Jersey-based Autodata Corp., which tracks the industry.
The Japanese currency dropped 1.4 percent against the dollar and 8.5 percent against the euro in the second quarter. A 1 yen drop against the dollar and the euro raises Toyota's annual operating profit by 35 billion yen and 5 billion yen, respectively, according to the company.
In the first half, a weaker domestic currency added 150 billion yen to operating profit.
A weaker yen helped increase profits at Toyota's rival automakers in Japan. Honda Motor Co., Japan's second-largest automaker, on Oct. 25 reported a 48 percent gain in second- quarter operating profit. Nissan Motor Co., Japan's third-biggest, on Oct. 26 said its operating profit jumped 12 percent in the period.
GM reports its earnings today. Ford Motor Co., which was surpassed by Toyota in U.S. sales in the first 10 months of this year, will release its results tomorrow. |
