- Q2 profit 562.7 bln yen vs 772.2 bln yen forecast
- Cuts FY manufacturing target to 9.2 mln items from 9.7 mln
- Unclear when chip scarcity will finish – government
- Results ‘very unimpressive’ contemplating optimistic components -analyst
- Shares finish down 1.9%, Nikkei benchmark up 0.3%
TOKYO, Nov 1 (Reuters) – Toyota Motor Corp (7203.T) on Tuesday posted a worse-than-expected 25% drop in quarterly profit and minimize its annual output target, as the Japanese agency battles surging materials prices and a persistent semiconductor scarcity.
The world’s largest automaker by gross sales additionally warned that it remained troublesome to foretell the longer term after posting its fourth consecutive quarterly profit decline, underlining the energy of enterprise headwinds it faces.
During the coronavirus pandemic, Toyota fared higher than most automobile makers in managing provide chains, however it fell sufferer to the extended chip scarcity this 12 months, reducing month-to-month manufacturing targets repeatedly.
“We’re out of the worst phase, but … it’s not necessarily a situation where we’re fully supplied,” mentioned Kazunari Kumakura, Toyota’s buying group chief. “I don’t know when the chip shortage will be resolved.”
Operating profit for the three months ended September fell to 562.7 billion yen ($3.79 billion), nicely in need of a median estimate of 772.2 billion yen in a ballot of 12 analysts by Refinitiv. Toyota gross sales reported a 749.9 billion yen profit a 12 months earlier, and 578.6 billion yen in profit within the first quarter.
Kumakura mentioned the worldwide auto chip scarcity continues, as chipmakers have prioritised provides for electronics items such as smartphones and computer systems, whereas pure disasters, COVID lockdowns and manufacturing facility disruption have slowed a restoration in auto chip provides.
He additionally mentioned the availability of older-type semiconductors, that appeal to little capital funding at the moment, would stay tight.
Amid the gloom, shares in Toyota closed down 1.9%, versus a 0.3% rise within the Nikkei (.N225) common.
Some analysts had been underwhelmed by the efficiency, saying different optimistic components past the chip scarcity ought to have offered a lift.
“The yen is weaker in the second quarter, the volume in the second quarter is much higher than in the first quarter, and the (COVID) lockdown in China does not affect (the volume in the second quarter),” mentioned Koji Endo, an analyst at SBI Securities.
“Considering these points … the absolute amount of profit in the second quarter has got to be higher than that of the first quarter. It is very unimpressive.”
Production rebounded by 30% within the quarter, however the firm warned final week shortages of semiconductors and different parts would proceed to constrain output in coming months.
Toyota mentioned it now expects to supply 9.2 million automobiles this fiscal 12 months, down from the beforehand forecast 9.7 million however nonetheless forward of final monetary 12 months’s manufacturing of about 8.6 million items.
Reuters reported final month Toyota had instructed a number of suppliers it was setting a worldwide target for the present enterprise 12 months to 9.5 million automobiles and signalled that forecast could possibly be lowered, relying on the availability of electromagnetic metal sheets.
MUTED YEN IMPACT
The yen has plunged round 30% this 12 months towards the U.S. greenback, however the advantage of a budget yen – making gross sales abroad price extra – has been offset by hovering enter prices.
The weak yen boosted profit by 565 billion yen within the first half of this monetary 12 months, however the acquire was greater than worn out by 765 billion yen improve in materials prices, with a budget native foreign money additional inflating import prices, Toyota mentioned.
Toyota retained its conservative profit outlook, sticking to its full-year working forecast of two.4 trillion yen for the fiscal 12 months via March 31 – nicely beneath analysts’ common forecast of three.0 trillion yen.
By comparability, South Korea’s Hyundai Motor (005380.KS) raised its income and profit margin steerage final month to mirror a overseas alternate carry.
Toyota, as soon as a darling of environmentalists for its hybrid gasoline-electric fashions, can also be underneath scrutiny from inexperienced traders and activists over its gradual push into totally electrical automobiles (EV).
Just a 12 months into its $38 billion EV plan, Toyota is already contemplating rebooting it to higher compete in a market rising past its projections, Reuters reported final month.
In a reputational hit, Toyota needed to recall earlier this 12 months its first mass-produced all-electric car after simply two months in the marketplace on account of security considerations, and droop manufacturing. It restarted taking leasing orders final month for home market.
Toyota reiterated on Tuesday that battery-powered EVs are a robust weapon for decarbonisation, however that there are numerous different choices to attain the aim.
($1 = 148.3100 yen)
Reporting by Satoshi Sugiyama; Writing by Miyoung Kim; Editing by Kenneth Maxwell
Our Standards: The Thomson Reuters Trust Principles.