Toyota Fourth-Quarter Profit Rises 9%, Expects Modest Growth Ahead
Toyota posted a stronger-than-expected 8.9% rise in quarterly net profit on buoyant sales in Western markets, and forecast modest growth this year as it adds production capacity all over the world.
Demand for Toyota's cars has climbed steadily in sputtering U.S. and European markets, driven by segment-leading models such as the Camry sedan and RAV4 crossover, while local brands have struggled to hold their own.
Toyota is set this year to end General Motors' 76-year reign as the world's biggest automaker after the U.S. group last week forecast global sales of 9.2 million vehicles against Toyota's plan to move 9.34 million.
Toyota has ensured steady growth by spending on new factories, added capacity and research and development -- all of which has kept profit margins in check.
Given this level of spending, a possibly stronger yen and high input costs, Japan's top automaker forecast a modest rise in profits for this year, joining its local rivals in providing cautious guidance.
For the year to end-March 2008, the world's most profitable carmaker forecast a 0.4% rise in net profit to 1.65 trillion yen ($13.8 billion) from 1.644 trillion yen in 2006/07. A consensus forecast from 22 brokers polled by Reuters Estimates predicts a much higher profit of 1.736 trillion yen.
Toyota forecast annual operating profit of 2.25 trillion yen, up 0.5% from 2.239 trillion yen last year, for a seventh straight year of record earnings.
Net profit for January-March -- a quarter that saw Toyota overtake GM in global sales volume -- was 440.1 billion yen, well ahead of a consensus estimate for 416.1 billion yen. GM earned a net $62 million that quarter.
Quarterly operating profit fell 2.8% to 570.5 billion yen despite a weaker yen. Revenue rose 10% to 6.33 trillion yen.
Excluding China, Toyota's sales in Asia declined last year along with the broader market, but the automaker is set to crank up volumes in 2007 with a new factory in Thailand. Toyota will also open a new plant in China soon to meet surging demand.
Elsewhere, Toyota has added capacity through affiliate Fuji Heavy Industries' Indiana plant, which builds the Camry, the United States' most popular car, with more coming online in Mexico and Russia by the end of 2007.
In the year to end-March, the Toyota group, which includes minivehicle maker Daihatsu and truck maker Hino, built 9.077 million vehicles worldwide, up 7.3%.
Shares in Toyota, whose $216 billion market value is more than 12 times that of GM, fell 5.2% in January-March, slightly better than Tokyo's transport sector subindex ITEQP, which fell 6.1%, but underperforming a 0.4% gain on the main Nikkei average
Before the results, Toyota ended down 0.6% at 7,200 yen.