Toyota Posts Surprising Profit

It was the company's first quarter in the black in a year.

Toyota Motor announced on Nov. 5 a return to profit and narrowed its loss forecast for the full year. It was the company's first quarter in the black in a year.

Toyota posted net earnings of 21.8 billion yen (US$240 million) for the fiscal second quarter to September, down 84.4% from a year earlier but much better than the first quarter's 77.8 billion yen loss.

A day after announcing it was quitting Formula One racing to slash costs, the company reported that operating profit dropped 65.8% year-on-year to 58 billion yen as revenue fell 24.4% to 4.23 trillion yen.

Toyota's vehicle sales declined in each region, but the company made progress in cutting costs, said vice president Yoichiro Ichimaru. "In addition, demand-stimulating measures by governments worldwide have contributed to our revised targets for the full fiscal year," he added. "However, the outlook for global vehicle demand still remains uncertain."

Toyota narrowed its annual net loss forecast to 200 billion yen from 450 billion and its operating loss projection to 350 billion yen from 750 billion. It lifted its global sales goal for the current financial year to 7.03 million vehicles from 6.6 million.

For the first half to September, Toyota logged a net loss of 56 billion yen, compared with a year-earlier profit of 493.4 billion yen. The result was much better than the company's own forecast for a 250 billion yen shortfall.

The company sold about 3.13 million vehicles worldwide in the six-month period, down 26.4% from the same period of the previous year.

Even though the North American operations returned to profit in the second quarter, "the business situation in the U.S. is still severe," said another Toyota vice president, Yukitoshi Funo.

Toyota's reputation has taken a blow in the U.S. from a huge recall involving 3.8 million vehicles following a deadly crash in California believed to be the result of an accelerator pedal that got trapped by a floor mat. Toyota denied on Nov. 5 there was any cover-up linked to the recall, after U.S. authorities accused it of misleading consumers with a statement saying no defect existed if the floor mat was compatible and properly secured.

"It is not part of Toyota's culture and the Toyota way to cover up anything," Funo said. The U.S. National Highway Traffic Safety Administration issued a statement on Nov. 4 "correcting inaccurate and misleading information put out by Toyota," which later said it had not intended to mislead anyone.

Copyright Agence France-Presse, 2009

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