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Tuesday, May 11, 2010

Toyota Records Surprising Profit

Toyota Posts $2.2 Billion Annual Profit

Source: New York Times

TOKYO — Toyota roared back to a profit in the fiscal year that just ended and forecast a further jump in earnings on Tuesday, shaking off the effects of a crippling global slowdown and a safety scandal that has threatened to ruin the Japanese automaker’s cherished reputation for quality.

Toyota thwarted a third consecutive year in the red thanks partly to a strong performance in the three months through March — the period when the Japanese automaker recalled millions of cars and was under the intense scrutiny of consumers and governments around the world .

Net profit for the three months was ¥112 billion, or $1.2 billion, compared with a ¥766 billion loss the year before, as the automaker slashed costs and introduced aggressive sales incentives that lured customers back to its showrooms.

“After taking over amid a storm, I wanted to do anything to avoid a third straight year in the red,” Toyota’s president Akio Toyoda, who took helm at the company in June 2009, said after the earnings announcement. “These results follow tough and anguishing decisions” on the part of Toyota’s management, he said, referring to the automaker’s dismissal of workers both in Japan and overseas amid company-wide cost cuts.

Quarterly revenue jumped to ¥5.28 trillion from ¥3.54 trillion the previous year, when car sales slumped in the midst of the global financial crisis. Revenues showed an especially strong rebound in the dynamic Chinese market and in the United States, while sales in Europe and Japan continued to slump.
Toyota estimated net income to rise to ¥310 billion in the business year through the end of March 2011, a conservative estimate. It expects to sell 7.29 million units, or 53,000 more than it sold this year, the automaker said. Toyota also announced a cash dividend for the full fiscal year of ¥45 per share.

For the past business year that just ended, net income rebounded to ¥209.4 billion, or $2.2 billion, from a loss of ¥437 billion the previous year.

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