Toyota keeps forecast as Q1 jumps on sales rise
Saturday, August 4, 2007
TOYOTA Motor Corp's quarterly operating profit rose by a better-than-expected 32 per cent as brisk overseas sales combined with a softer yen to make up for chronic weakness in domestic demand.
Toyota, the world's biggest and most profitable automaker, left its cautious annual forecasts unchanged, as expected.
The Japanese firm, valued at US$215 billion more than 10 times the market capitalisation of US rival General Motors Corp is on its way to a seventh straight year of record earnings, powered by a rapid expansion into developing markets such as China and Russia.
It is also cranking up market share in mature regions such as North America and Europe with fuel-efficient cars such as the Prius hybrid and RAV4 crossover as well as an entry into the full-sized pickup truck segment with the Tundra model.
"This is a very strong and good earnings result," said Koji Endo, auto analyst at Credit Suisse Securities.
"Others like Honda Motor Co and Suzuki Motor Corp had good earnings but their results were pushed by exchange rate factors only, while Toyota's results were helped also by improvement in other fundamental factors."
Toyota's strength also lies in its lean operations and cost-cutting savvy, which have enabled it to absorb a stubborn rise in commodity prices. Although it spends heavily to develop next-generation environmental and safety technologies, Toyota has the highest operating margin in the global auto industry, at above 10 per cent of sales for the latest quarter.
Operating profit for the April-June first quarter was 675.43 billion yen (US$5.67 billion), far ahead of an average estimate of 612.4 billion yen in a poll of six brokerages by Reuters Estimates.
Net profit also soared 32 per cent to 491.54 billion yen while revenue grew 15.7 per cent to 6.52 trillion yen.
Currency gains added 100 billion yen to the growth in operating profit, but Toyota said its own efforts had also contributed to a record quarter for revenue and profits.
"We have increased our sales volume in all regions excluding Japan," Takeshi Suzuki, senior managing director, told a news conference. "Our core earnings are growing solidly."
Toyota kept its forecasts for the year to end-March 2008 unchanged, saying that although exchange rates were trading at more favourable levels than its assumptions of 115 yen to the dollar and 150 per euro it was too early to factor in other uncertain risk factors.
Toyota forecasts operating and net forecasts at 2.25 trillion yen and 1.65 trillion yen, respectively, versus consensus forecasts for 2.45 trillion yen and 1.77 trillion yen. It also kept its global sales volume forecast unchanged at 8.89 million vehicles.
Toyota's sales drive has helped its group end GM's 75-year reign as the world's biggest automaker in 2006.
Reuters
Toyota, the world's biggest and most profitable automaker, left its cautious annual forecasts unchanged, as expected.
The Japanese firm, valued at US$215 billion more than 10 times the market capitalisation of US rival General Motors Corp is on its way to a seventh straight year of record earnings, powered by a rapid expansion into developing markets such as China and Russia.
It is also cranking up market share in mature regions such as North America and Europe with fuel-efficient cars such as the Prius hybrid and RAV4 crossover as well as an entry into the full-sized pickup truck segment with the Tundra model.
"This is a very strong and good earnings result," said Koji Endo, auto analyst at Credit Suisse Securities.
"Others like Honda Motor Co and Suzuki Motor Corp had good earnings but their results were pushed by exchange rate factors only, while Toyota's results were helped also by improvement in other fundamental factors."
Toyota's strength also lies in its lean operations and cost-cutting savvy, which have enabled it to absorb a stubborn rise in commodity prices. Although it spends heavily to develop next-generation environmental and safety technologies, Toyota has the highest operating margin in the global auto industry, at above 10 per cent of sales for the latest quarter.
Operating profit for the April-June first quarter was 675.43 billion yen (US$5.67 billion), far ahead of an average estimate of 612.4 billion yen in a poll of six brokerages by Reuters Estimates.
Net profit also soared 32 per cent to 491.54 billion yen while revenue grew 15.7 per cent to 6.52 trillion yen.
Currency gains added 100 billion yen to the growth in operating profit, but Toyota said its own efforts had also contributed to a record quarter for revenue and profits.
"We have increased our sales volume in all regions excluding Japan," Takeshi Suzuki, senior managing director, told a news conference. "Our core earnings are growing solidly."
Toyota kept its forecasts for the year to end-March 2008 unchanged, saying that although exchange rates were trading at more favourable levels than its assumptions of 115 yen to the dollar and 150 per euro it was too early to factor in other uncertain risk factors.
Toyota forecasts operating and net forecasts at 2.25 trillion yen and 1.65 trillion yen, respectively, versus consensus forecasts for 2.45 trillion yen and 1.77 trillion yen. It also kept its global sales volume forecast unchanged at 8.89 million vehicles.
Toyota's sales drive has helped its group end GM's 75-year reign as the world's biggest automaker in 2006.
Reuters
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