The world’s largest automaker Toyota Motor (NYSE: TM) says it expects operating profit to fall 35% this year after production was severely disrupted by Japan’s biggest earthquake on record.
Toyota is forecasting $3.7 billion in operating profit, 30% lower than analysts’ expectations.
But Toyota says the March quake will not deter the company from making planned investments.
Executive Vice President Satoshi Ozawa says:
“Despite the disaster, we’ll make no changes to our mid-term strategy. Investments for the next generation eco-friendly vehicles and for the emerging markets will be made actively and strategically while pursuing efficiency.”
Toyota adds it now expects the dollar to average 82 yen in the current financial year, against last year’s rate of 86 yen to the dollar.
The company expects its group-based global vehicle sales to fall by 60,000 units this business year from last year’s 7.3 million units.
The lower volumes would likely mean the Japanese automaker will fall behind General Motors and possibly Volkswagen to rank third in global vehicle sales this year.
Toyota shares have fallen 7.5% since the 9 magnitude earthquake rocked northeastern Japan in March, forcing Toyota and other Japanese automakers to cut output at home and abroad.
Toyota earnings fell 52% in the January-March quarter, and the company also delayed providing guidance for the full business year, until June 10.
Bottom line: Automaker Toyota says it expects operating profit to fall 35% this business year after Japan’s biggest earthquake on record severely disrupted its operations. Wall Street analysts might say, “Buy Toyota”… but we still say, “No Chance!”