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Toyota Sharply Downgrades Earnings Forecast

Blames strong yen, Thai flooding.

by on Dec.09, 2011

Toyota faces a grim fiscal year.

Weeks after company officials expressed their hopes that things were getting back to normal, Toyota officials have issued a bleak forecast that sharply downgrades its earnings for the rest of the fiscal year.

Having earlier cut earnings projections due to the March 11 earthquake and tsunami that devastated Japan – and led to months of automotive production cuts – Toyota now says the strong yen, as well as Thai flooding, will reduce its earnings for the fiscal year, which ends March 31, by more than half.

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The maker now anticipates a net profit of 180 billion – or $2.3 billion at the current exchange rate – down from the 390 billion yen it forecast in August.  During a conference call this morning it also said revenues will dip from the earlier forecast of 19 trillion yen to just 18.2 trillion, or $234.4 billion.


Toyota Profits Plunge as New Challenges Threaten Future Earnings

Maker withdraws future guidance as parts shortages worsen in wake of Thai flooding.

by on Nov.08, 2011

Toyota CEO Akio Toyoda at the launch of the Lexus GS in Pebble Beach last August.

Toyota reported a sharp 18.5% downturn in its latest quarterly earnings, largely the result of parts and product shortages caused by the earthquake and tsunami that struck northeastern Japan last March.  But the maker warned it is facing new challenges ahead.  On an operating basis, the maker said it lost $418 million for the first half of its fiscal year, compared with a $4.1 billion profit a year ago.

In a presentation from Tokyo, Toyota officials withdrew their earlier guidance for the rest of the fiscal year – which ends on March 31, 2012 – due to the potential havoc the company faces in the wake of the flooding that struck Thailand last month.  That has disrupted supplies of both vehicles and parts, resulting in new production cuts at Toyota plants around the world.

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Further complicating matters, the yen continues to gain strength against the dollar and other major currencies. The current exchange rates are “far beyond what is tolerable,” Toyota CEO Akio Toyoda said earlier in the week, warning that if the trend isn’t reversed Japan’s manufacturing base could be “destroyed.”