Toyota surprises with Q2 profit

[rickaren]

Toyota surprises with Q2 profit; halves loss outlook

Posted on Thursday, November 5th, 2009 at 5:04 PM EST.(Employee News)

Toyota Motor Corp’s surprise quarterly profit and halving of its annual loss forecast were not enough to convince investors that the world’s No.1 carmaker had escaped the worst, as government subsidies peter out and a strong yen takes its toll, Reuters reported.

Toyota, the world’s biggest carmaker by sales, wrapped up an earnings season dominated by rosier projections from Japanese automakers as they squeeze out savings and boost manufacturing efficiencies to offset the damaging rise in the yen, the news service said. The industry has been helped by government-backed incentives from Germany to China and Japan, aimed at igniting demand through the worst economic crisis in generations, Reuters said.

But with the outlook for demand uncertain as such stimulus programs begin to run out, Toyota is looking to eliminate more spending, announcing its exit from Formula One racing on Wednesday to put its annual budget of around $300 million to better use, the news service said. Toyota, until two years ago the world’s most profitable automaker, had been the only top Japanese carmaker expected to post a loss in the latest quarter, weighed down by severe overcapacity after years of building new factories during its boom years before the financial crisis hit, the article said.

Toyota now expects an operating loss of 350 billion yen ($3.9 billion) for the year to March 31, still above an average projection of a 293 billion yen loss in a poll of 22 analysts by Thomson Reuters I/B/E/S. It narrowed its net loss forecast to 200 billion yen from 450 billion yen, the story said. (Reuters)