Toyota’s Profit Drops 77% After Record Quake Slows Sales

Toyota’s Profit Drops 77% After Record Quake Slows Sales

May 11 (Bloomberg) -- Toyota Motor Corp., the world’s largest carmaker, said fourth-quarter profit fell 77 percent after Japan’s record earthquake disrupted production and crimped domestic sales.

Toyota reported net income of 25.4 billion yen ($314 million) for the three months ended March 31, compared with the 104 billion yen average of four analyst estimates compiled by Bloomberg in the past four weeks. Sales fell 12 percent to 4.64 trillion yen, the Toyota City, Japan-based company said.

The output disruptions may cause Toyota to fall behind both General Motors Co. and Volkswagen AG in global sales this year. The natural disaster was another blow to President Akio Toyoda whose first full year on the job was consumed by recalls that totaled more than 10 million vehicles for problems related to unintended acceleration.

“Toyota’s production will most certainly fall from last year’s level, while both GM and Volkswagen will make big gains in the U.S., Europe and China,” said Koji Endo at Advanced Research Japan in Tokyo. The Japanese carmaker’s global output may decline to less than 6.5 million vehicles this year from 8.4 million in 2010, he said.

The automaker’s recovery may also be hindered by power shortages in Japan after the March 11 quake and tsunami forced the nation to close nuclear power plants.

The carmaker is working to restore full operations after the 9-magnitude temblor and tsunami that struck Japan damaged parts factories and power plants, causing shortages of components and electricity.

Toyota’s vehicle sales in Japan plunged 69 percent last month, leading the eighth straight drop in the nation’s monthly auto deliveries because of parts shortages following the earthquake and a government subsidy program ended.

Toyota resumed output at all Japan plants at half of normal capacity on April 18. All of the company’s factories were closed for two weeks following the quake, with hybrid car production resuming March 28.

Shares in the automaker rose 0.6 percent to 3,270 yen at the 3 p.m. close of trading in Tokyo, before the earnings announcement. The stock has dropped 10.4 percent since March 10, the day before the earthquake.

source: bloomberg.com