Toyota May Report Smallest Profit Growth in a Year
February 04, 2008

Toyota Motor Corp. may report the smallest profit growth in four quarters because of the rising yen and slowing U.S. demand, Bloomberg News reported Monday. Toyota announces its quarterly earnings Tuesday.

Net income gained 8.2 percent to the equivalent of $4.3 billion for the three months ended December 31 with sales advancing 7 percent, according to the average of five analyst estimates compiled by Bloomberg.

Analysts predict Toyota increased orders in the U.S., its most profitable market, by 1 percent last quarter, compared with a 46 percent surge in China and a 26 percent jump in Russia. But the yen gained 4 percent against the dollar in the three months compared with a year earlier, eroding earnings from exports of the Prius and Lexus LS sedans.

Toyota's U.S. sales in January declined 2.3 percent. In contrast, Toyota’s sales in China grew 62 percent in 2007.

“The U.S. economy is slowing, and companies like Toyota already have a high market share,” said Edwin Merner, president of Atlantis Investment Research Corp. in Tokyo, told Bloomberg. “It's difficult to increase once you reach a certain size.”'

Toyota shares slumped 11 percent in the three months, its second-worst quarterly performance in more than four years, Bloomberg reported.

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