Toyota's net profit up 7.5% to $4.3 billion
02-05-08 | 07:50 AM
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Toyota's net profit up 7.5% to $4.3 billion
Toyota 2007 Q4
Emerging Markets Boost
Toyota's Net Income
North American Sales Ease Slightly
By JOHN MURPHY
February 5, 2008 9:22 a.m.
TOKYO -- Toyota Motor Corp. boosted net profit by 7.5% in the October to December quarter, thanks to strong sales in China, Russia and other emerging markets, but saw quarterly sales in its key North American market decline for the first time in more than four years amid growing fears of a U.S. slowdown.
Toyota's net profit rose to ¥458.67 billion ($4.3 billion) in the three months ended Dec. 31, up from ¥426.77 billion a year earlier, while sales climbed 9.2% to ¥6.71 trillion from ¥6.147 trillion. Operating profit edged up 4.7% to ¥601.5 billion from ¥574.79 billion.
Toyota sold 756,000 vehicles in North America during the three months ended Dec. 31, 1% less than a year earlier. That was the first time the company saw a decline in North American quarterly sales since 2003, when sales fell 2,000 vehicles to 509,000 for the April-June period, Toyota said. The car maker cut its full-year sales forecast for North America by 20,000 vehicles to 2.97 million. Sales of the hybrid Prius remain strong although the company's larger SUVs such as the 4Runner are down.
Sales in Asia increased by 37,000 vehicles to 241,000 units, lifted by strong sales in China and increased production capacity in Thailand and Indonesia. Toyota also saw strong growth in Central and South America, Africa, and Oceania, where it sold 435,000 vehicles, up 95,000 from the previous year. In Europe, sales increased a modest 2,000 units to 308,000 vehicles. In Japan, new car sales remained flat with total sales of 541,000 vehicles for the quarter.
The results for Toyota, which is tied with General Motors Corp. as the world's largest auto maker, come as Japanese car makers are increasingly hit by a slowdown in the U.S. market amid higher oil prices and rising concerns of a U.S. recession. Last week, Toyota said sales in the U.S. in January fell 2.3% to 171,849 compared to a year earlier. Honda Motor Co.'s U.S. sales fell 2.3% in January, while Nissan Motor Co.'s U.S. sales dropped 7.3%.
Toyota and other Japanese car makers have been able to offset softness in the U.S. market by posting strong results in the fast-growing emerging markets. Toyota's aggressive push into markets such as China and Russia, for example, lessened its dependence in North America. In the first three quarters of this fiscal year, North American sales accounted for 44% of Toyota's operating income outside Japan compared to 57% a year earlier.
Still, North America remains a key source of the companies' profits, and investors remain concerned about the impact of the U.S. subprime crisis and the stronger yen, which diminishes the value of its overseas earnings.
Share prices in Toyota, Honda and Nissan have fallen sharply this year as investors take a wait-and-see approach until they can understand the impact of the economic uncertainties, analysts say.
"People don't know what's going on. Nobody has a crystal ball. Until that uncertainty is gone, I don't expect the stocks to perform well, even blue chip stocks like Honda or Toyota," said Tatsuo Yoshida, a senior analyst for UBS Securities Japan Ltd.
Nevertheless, Toyota Managing Director Takeshi Suzuki remained optimistic about the long-term prospects of the U.S. economy.
"While there is an increase in sales in the developing countries, that doesn't mean the strength of the U.S. market has weakened," he said. "Over the long term we believe the American economy will grow. That is why we are expanding our capacity," he added.
Toyota kept its forecast for the full year ending March 31, 2008. It said it expects sales of 8.93 million vehicles, net revenue of ¥25.5 trillion, operating income of ¥2.3 trillion and net profit of ¥1.7 trillion.
Write to John Murphy at john.murphy@wsj.com
Toyota's Net Income
North American Sales Ease Slightly
By JOHN MURPHY
February 5, 2008 9:22 a.m.
TOKYO -- Toyota Motor Corp. boosted net profit by 7.5% in the October to December quarter, thanks to strong sales in China, Russia and other emerging markets, but saw quarterly sales in its key North American market decline for the first time in more than four years amid growing fears of a U.S. slowdown.
Toyota's net profit rose to ¥458.67 billion ($4.3 billion) in the three months ended Dec. 31, up from ¥426.77 billion a year earlier, while sales climbed 9.2% to ¥6.71 trillion from ¥6.147 trillion. Operating profit edged up 4.7% to ¥601.5 billion from ¥574.79 billion.
Toyota sold 756,000 vehicles in North America during the three months ended Dec. 31, 1% less than a year earlier. That was the first time the company saw a decline in North American quarterly sales since 2003, when sales fell 2,000 vehicles to 509,000 for the April-June period, Toyota said. The car maker cut its full-year sales forecast for North America by 20,000 vehicles to 2.97 million. Sales of the hybrid Prius remain strong although the company's larger SUVs such as the 4Runner are down.
Sales in Asia increased by 37,000 vehicles to 241,000 units, lifted by strong sales in China and increased production capacity in Thailand and Indonesia. Toyota also saw strong growth in Central and South America, Africa, and Oceania, where it sold 435,000 vehicles, up 95,000 from the previous year. In Europe, sales increased a modest 2,000 units to 308,000 vehicles. In Japan, new car sales remained flat with total sales of 541,000 vehicles for the quarter.
The results for Toyota, which is tied with General Motors Corp. as the world's largest auto maker, come as Japanese car makers are increasingly hit by a slowdown in the U.S. market amid higher oil prices and rising concerns of a U.S. recession. Last week, Toyota said sales in the U.S. in January fell 2.3% to 171,849 compared to a year earlier. Honda Motor Co.'s U.S. sales fell 2.3% in January, while Nissan Motor Co.'s U.S. sales dropped 7.3%.
Toyota and other Japanese car makers have been able to offset softness in the U.S. market by posting strong results in the fast-growing emerging markets. Toyota's aggressive push into markets such as China and Russia, for example, lessened its dependence in North America. In the first three quarters of this fiscal year, North American sales accounted for 44% of Toyota's operating income outside Japan compared to 57% a year earlier.
Still, North America remains a key source of the companies' profits, and investors remain concerned about the impact of the U.S. subprime crisis and the stronger yen, which diminishes the value of its overseas earnings.
Share prices in Toyota, Honda and Nissan have fallen sharply this year as investors take a wait-and-see approach until they can understand the impact of the economic uncertainties, analysts say.
"People don't know what's going on. Nobody has a crystal ball. Until that uncertainty is gone, I don't expect the stocks to perform well, even blue chip stocks like Honda or Toyota," said Tatsuo Yoshida, a senior analyst for UBS Securities Japan Ltd.
Nevertheless, Toyota Managing Director Takeshi Suzuki remained optimistic about the long-term prospects of the U.S. economy.
"While there is an increase in sales in the developing countries, that doesn't mean the strength of the U.S. market has weakened," he said. "Over the long term we believe the American economy will grow. That is why we are expanding our capacity," he added.
Toyota kept its forecast for the full year ending March 31, 2008. It said it expects sales of 8.93 million vehicles, net revenue of ¥25.5 trillion, operating income of ¥2.3 trillion and net profit of ¥1.7 trillion.
Write to John Murphy at john.murphy@wsj.com
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