Toyota sees first operating loss
Toyota Motor Corp forecast a first-ever annual operating loss, blaming a relentless sales slide and a crippling rise in the yen in what it said was an emergency unprecedented in its 70-year history.
Toyota, the world’s biggest automaker, had been expected to issue its second profit warning in less than seven weeks after domestic rival Honda Motor Co also cut its outlook again last week, but the downward revision was bigger than predicted.
“This is very, very, very bad,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. “There’s a chance they could fall into the red in the next business year as well.
“This is also not just a problem for Toyota. What is good for Toyota is good for the Japanese economy.”
Automakers around the world face their toughest business environment in recent memory, caught in a sharp reversal of demand as the financial crisis spreads, squeezing credit and consumer sentiment.
Toyota cut its group operating forecast to a loss of 150 billion yen ($1.7 billion) for the year to end-March, after shocking financial markets last month by slashing its group operating profit forecast by 1 trillion yen to 600 billion yen.
It made a record profit of 2 health insurance plans.27 trillion yen last year.
Analyst forecasts on Reuters Estimates ranged from a loss of 150 billion yen to a profit of 800 billion yen for figures not updated since conditions deteriorated in the past month.
Toyota now expects group net profit of 50 billion yen instead of 550 billion yen.
Toyota shares closed down 0.2 percent ahead of the announcement in a firmer Tokyo market. Its Frankfurt-listed shares fell 2.4 percent in light trade.
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BIG STEP BACK
Like the rest of the industry, Toyota has idled factories, slowed assembly lines and delayed manufacturing projects, such as the start of a Mississippi plant under construction to build the Prius hybrid model, and said it would continue those moves until the tide turned.
“We are facing an unprecedented emergency,” President Katsuaki Watanabe told a year-end news conference. “This is a crisis unlike the crises of the past.”