Toyota sets sales, earnings records

While most automakers struggle, it says next year will see more, if slower, growth

May 10, 2007|By Detroit Free Press

DETROIT -- With most global automakers coming off a difficult year, Toyota Motor Corp. reported record annual profit yesterday and forecast a slower - but still growing - year to come.

Toyota's net income rose 20 percent to 1.64 trillion yen, or $14 billion, for the most recent fiscal year, which ended March 31. It projected profits will rise again in the current year to 1.65 trillion yen, or $14.3 billion, though an executive suggested that management's guidance is intended as the low end of likely results.

Toyota's revenue rose 14 percent to a record 23.94 trillion yen, or $204 billion. Worldwide vehicle sales in the period totaled 8.52 million, an increase of 550,000 compared with the previous fiscal year and also a record.

"For fiscal year 2007, Toyota posted record consolidated results across the board," said Toyota President Katsuaki Watanabe. "We believe our continuous efforts to support global growth have steadily contributed to our record net revenues, operating income and net income."

For the final quarter of its fiscal year, Toyota's net income rose 9 percent to 440 billion yen, or $3.7 billion. Fourth-quarter revenue increased 10 percent to 6.3 trillion yen, or $53 billion. The results for the full year included a 290 billion yen, or $1.6 billion, positive impact from favorable exchange rates.

Toyota vehicle sales dropped in its most recent fiscal year in Japan but rose in North America and Europe. Toyota projected yesterday that its North American sales would increase again this year to 2.99 million vehicles, up from 2.94 million last year.

In a conference call with analysts, Takeshi Suzuki, who heads Toyota's accounting group, said these forecasts were conservative. Rising gasoline prices have created uncertainty, but Toyota believes it holds a competitive position in North America, he said.

"When it comes to actual deployment of business, we will make every effort so that we will surpass the forecasted level of 2.99 million units for the sales volume for North America next year," Suzuki said through an interpreter. "Rather, we would like to even exceed and achieve a level higher than 3 million."

Almost 20 percent of Toyota's automotive operating profit comes from North America, where domestic automakers are all losing money and market share.

The results come as Toyota is poised to pass General Motors Corp. as the world's largest automaker this year. It outsold GM for the first time ever in the January-March period.

Toyota made gains in what was a difficult period for Detroit automakers and their Japanese counterparts. In 2006, Ford lost a record $12.7 billion as the three Detroit automakers all lost money in the same year for the first time in a decade and a half. Japanese rivals Nissan Motor Co. and Honda Motor Co. both made money in 2006, but their profits were down from the year before.

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