Toyota Loses $819 Million in Quarter; Better Than Analysts' Estimates
August 04, 2009
Toyota reported Tuesday it lost 77.8 billion yen -- the equivalent of $819 million (U.S.) in the
most recent quarter. The loss was smaller than analysts had forecasted, suggesting the worst is over and that Toyota's full-year losses will be less than previously expected.
Toyota said it now expects to lose 450 billion yen ($4.7 billion) for the fiscal year that ends March 31, 2010. Previously, Toyota expected to lose 550 billion yen ($5.8 billion) for the year.
In a conference call with media and analysts Wednesday morning, Toyota Managing Officer Takuo Sasaki noted a dramatic drop in vehicle sales volume. "However, the introduction of demand stimulating measures by various governments, including Japan, has begun to trigger a revival in some regions," he said.
He said Toyota now expects a sales increase in Japan for the first time in five years, thanks to a government incentives for fuel-efficient vehicles. As a result, Toyota boosted its forecast for global sales to 6.6 million, up from 6.5 million forecasted in May. The added 100,000 units will come from Japan and be largely the Toyota Prius and Lexus HS 250h hybrids. Despite the increased forecast, Toyota sales this year will remain below last year's. Toyota sold 7.57 million vehicles in its last fiscal year, which ended in March.
In the U.S., Sasaki said the July sales spike in the U.S., reported Monday, is good news and could push annual sales for 2009 closer to 10 million units than the 9.5 million, the bottom of the range Toyota had expected. He predicted the new Toyota Prius and Lexus hybrids will help the automaker in the U.S. "But there are still significant risk factors in the U.S., mainly rising unemployment," he said.
In addition to sales increases, Sasaki said Toyota's cost-cutting measures are bearing fruit -- even more than expected when emergency efforts began earlier this year. Akio Toyoda, who just took over as chief executive in June, has vowed to return the group to profitability in 2010-2011. Toyota has cut production, frozen new investments -- including mothballing a new assembly in Mississippi -- and slashed thousands of contract jobs in Japan.
Sasaki said production cuts got Toyota close to optimal inventory levels by end of June so no further production cuts will be required. In fact, Sasaki said Toyota will steadily ramp up production.
Indeed, Toyota's inventories in the U.S. are low, with most vehicles at 30- to 40-day inventory levels, well below the 60-day optimum. "We have to gradually increase the inventory levels [in the U.S.]," he said.
Toyota's 77.8-billion loss in its first quarter compares with a net profit of 353.7 billion yen in the first quarter of last year. Still, most analysts had predicted a loss of 184 billion yen. In this first quarter, Toyota sold 1.4 million vehicles, down 785,000 vehicles from a year ago.
Despite continuation of cost-cutting, however, Sasaki said Toyota will not reduce its capital expenditures and research and development spending, as it focuses on developing vehicles more in line with customer demand, including more environmentally friendly ones. -- By Michelle Krebs
Posted by Michelle Krebs at 5:01 AM under Business , News , Toyota | Comments (1) | digg this | Seed Newsvine
If Toyota dealers would deal instead of jacking their customers around they'd be selling more vehicles, especially Sequioa's. Toyota also blew it by depleting their Sequioa inventory too much so that none were available when 0% was announced in April and I was vehicle shopping. Dealers still have little or no stock, except for those dealers who want MSRP for everything.
Posted by: canddmeyer | August 04, 2009 at 1:46 PM