Thai floods force Toyota to withdraw forecasts
Source: Agencies |
November 9, 2011, Wednesday
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Print Edition
Print Edition
TOYOTA Motor Corp withdrew its annual profit guidance yesterday as Thai floods threaten output just as it had recovered from supply shortages that battered production after the March earthquake in Japan.
Like Toyota, Honda Motor Co also dropped its earnings forecasts after being hard hit by Thailand's worst floods in at least 50 years, although Nissan Motor Co raised its outlook as it adapts more quickly to the disaster.
Toyota, Japan's top automaker, posted a bigger-than-expected 32 percent slide in quarterly operating profit, crimped in part by a soaring yen as the company was recovering from the earthquake and tsunami.
But it reaffirmed a commitment to manufacture at home even if the yen's strength makes exports less competitive against rivals such as South Korea's Hyundai Motor Co and it outlined plans to cope with the exchange rate.
Once the world's most envied and profitable automaker, Toyota has lost its shine against domestic rival Nissan, which a Toyota executive said may have proven more adept at dealing with the crises affecting both companies this year.
"I can't deny that Nissan may have done some things right, given the outcome of how they recovered from both the earthquake and the floods," Toyota's chief financial officer, Satoshi Ozawa, told a news conference in Tokyo. "If there's something there to learn from, we'd like to do that."
Toyota's three vehicle plants in Thailand, its Southeast Asian export hub, halted work on October 10 because of the floods, and a shortage of parts forced it to cut output in nine other countries, including Japan. The three plants will be down at least until November 12, the company has said.
Toyota said operating profit for July-September, its second quarter, was 75.39 billion yen (US$966 million), far short of an average estimate of 101.3 billion yen in a survey of 12 analysts. Net profit dropped 18.5 percent to 80.42 billion yen, while revenue fell 4.8 percent to 4.57 trillion yen. Global vehicle sales slid 4.7 percent to 1.805 million.
In contrast, Nissan last week lifted its profit forecasts as it achieves robust sales growth and limits the impact of a parts shortage from Thailand with substitute procurement. It expects a restart in Thai production next week.
"Companies now need to adopt new ideas and move faster," said Tetsuro Ii, chief executive officer of Commons Asset Management in Tokyo. "Some companies, such as Nissan, are doing this well ... It's too soon to make a judgment on Toyota's and Honda's long-term prospects, but I can't help but get the impression that they are slow in their reforms."
Before withdrawing its forecasts, Toyota had projected an operating profit of 450 billion yen for the year to March 2012, against a consensus forecast of 486 billion yen in a survey of 21 analysts.
Toyota said the Thai calamity would force it to keep its Japanese production reduced at least until November 18. It was still undecided on production elsewhere.
Like Toyota, Honda Motor Co also dropped its earnings forecasts after being hard hit by Thailand's worst floods in at least 50 years, although Nissan Motor Co raised its outlook as it adapts more quickly to the disaster.
Toyota, Japan's top automaker, posted a bigger-than-expected 32 percent slide in quarterly operating profit, crimped in part by a soaring yen as the company was recovering from the earthquake and tsunami.
But it reaffirmed a commitment to manufacture at home even if the yen's strength makes exports less competitive against rivals such as South Korea's Hyundai Motor Co and it outlined plans to cope with the exchange rate.
Once the world's most envied and profitable automaker, Toyota has lost its shine against domestic rival Nissan, which a Toyota executive said may have proven more adept at dealing with the crises affecting both companies this year.
"I can't deny that Nissan may have done some things right, given the outcome of how they recovered from both the earthquake and the floods," Toyota's chief financial officer, Satoshi Ozawa, told a news conference in Tokyo. "If there's something there to learn from, we'd like to do that."
Toyota's three vehicle plants in Thailand, its Southeast Asian export hub, halted work on October 10 because of the floods, and a shortage of parts forced it to cut output in nine other countries, including Japan. The three plants will be down at least until November 12, the company has said.
Toyota said operating profit for July-September, its second quarter, was 75.39 billion yen (US$966 million), far short of an average estimate of 101.3 billion yen in a survey of 12 analysts. Net profit dropped 18.5 percent to 80.42 billion yen, while revenue fell 4.8 percent to 4.57 trillion yen. Global vehicle sales slid 4.7 percent to 1.805 million.
In contrast, Nissan last week lifted its profit forecasts as it achieves robust sales growth and limits the impact of a parts shortage from Thailand with substitute procurement. It expects a restart in Thai production next week.
"Companies now need to adopt new ideas and move faster," said Tetsuro Ii, chief executive officer of Commons Asset Management in Tokyo. "Some companies, such as Nissan, are doing this well ... It's too soon to make a judgment on Toyota's and Honda's long-term prospects, but I can't help but get the impression that they are slow in their reforms."
Before withdrawing its forecasts, Toyota had projected an operating profit of 450 billion yen for the year to March 2012, against a consensus forecast of 486 billion yen in a survey of 21 analysts.
Toyota said the Thai calamity would force it to keep its Japanese production reduced at least until November 18. It was still undecided on production elsewhere.
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