Toyota profit up fivefold on weak yen, good sales
By YURI KAGEYAMA | AP Business Writer February 4, 2014 7:38AM
Toyota Motor Corp. kept its position at the top in global vehicle sales for the first quarter of this year, outpacing rivals General Motors and Volkswagen. Toyota said Wednesday it sold a record 2.583 million vehicles. | AP file photo
Updated: February 4, 2014 7:38AM
TOKYO — Toyota Motor Corp. reported a more than fivefold jump in its quarterly profit Tuesday and raised its earnings forecast, crediting a weak yen and strong sales.
Toyota’s profit for the October-December quarter totaled a better-than-expected 525.4 billion yen ($5.2 billion), up dramatically from 99.9 billion yen a year earlier. Quarterly sales jumped 24 percent to 6.585 trillion yen ($64.2 billion).
Analysts polled by FactSet had expected a 437 billion yen ($4.3 billion) quarterly profit.
Toyota, the world’s top selling automaker for the last two years straight, raised its profit and sales forecasts for the fiscal year ending March.
The upbeat outlook underlines a continuing recovery at Toyota, whose production was battered by a tsunami and earthquake in March 2011 in northeastern Japan.
Sales also suffered over anti-Japanese sentiment that flared up in China, a key growth market, in 2012.
Before such woes, Toyota’s brand image had been devastated by a massive recall crisis, which began in late 2009, mostly in North America, for defects spanning brakes, gas pedals, floor mats and other problems.
The maker of the Prius hybrid, Lexus luxury models and the Camry sedan now projects a fiscal year profit of 1.9 trillion yen ($18.8 billion), a doubling of profit compared with the fiscal year that ended March 31, 2013, and a company record.
Its previous annual profit forecast was 1.67 trillion yen ($16.5 billion).
“Our upwardly revised forecast is due to progress in our recent profit improvement activities through cost reduction and marketing efforts, in addition to the change in our assumption of foreign exchange rates,” Managing Officer Takuo Sasaki said in a statement.
The company had previously expected the dollar to average 81 yen, but it’s now expecting 100 yen. The dollar was trading at about 101 yen Tuesday. A weak yen is beneficial for Japanese exporters such as Toyota by boosting the value of its overseas sales.
Toyota logged a 260 billion yen ($2.6 billion) profit perk from foreign exchange rate effects during the latest quarter.
The automaker raised its full year sales forecast to 25.5 trillion yen ($252 billion) from 25 trillion yen ($248 billion). That would represent a 16 percent rise from the previous fiscal year’s sales at 22.06 trillion yen.
It kept unchanged its global vehicle sales forecast for the fiscal year through March at 10.1 million vehicles, which would be the first time any automaker reaches the 10 million milestone in annual sales.
For the quarter just ended, Toyota sold more vehicles compared with a year earlier in every key region, including the U.S., Europe, Japan and the rest of Asia.