Toyota Motor Corp said earlier today that it powered itself to a record earnings...
Toyota Motor Corp said earlier today that it powered itself to a record earnings figures in the 2001/2002 period while Japanese rival Mitsubishi Motors Corp announced a profit for the first time in three years, rounding off a strong earnings season for Japan's carmakers.
Fueled by a weak yen and robust US sales, particularly at its Lexus luxury vehicle division, Toyota said that group operating profit leapt by twenty nine percent to a record 1.12 trillion yen ($8.78 billion) in the year ended March 31st.
That made Japan's biggest carmaker the second Japanese firm after mobile phone giant NTT DoCoMo to book an operating profit of one trillion yen for the year.
DoCoMo posted an operating profit of one trillion yen exactly but also took huge appraisal losses on its overseas investments.
The automaker's recurring profit also topped one trillion yen at a record 1.11 trillion and net profit increased 30.7 percent to 615.82 billion yen, also a record. ?We had record profits across the board and we are very pleased with the results,? Executive Vice President Ryuji Araki told a news conference.
Toyota is the third Japanese automaker to report record earnings for the period after Honda Motor and Nissan Motor which saw operating profits rise by fifty seven percent and sixty seven percent respectively.
But while Toyota, twice as big as its nearest domestic rival and overshadowing its peers in absolute terms, it lagged by other measures of efficiency such as operating margin.
Group operating margin was 7.4 percent, against Honda's 8.7 percent and Nissan's 7.9 percent.
?Toyota needs to use its large cash flow more efficiently and rationalize its platforms and models as Honda has done,? said Hideo Ueki, executive director at UBS Asset Management.
Toyota's Araki said, however, that Toyota should not be directly compared to it rivals.
"We are a different type of company. If you look at history, we have not had the big swings from red to black,? he said. ?We've shown steady growth and that's how investors should look at our stock.?
Profits for the beleaguered Mitsubishi were more subdued but no less welcome. Net profit, the first in three years, came in at 11.26 billion yen ($88.23 million) compared with a loss of 278.14 billion yen the previous year. Aggressive cost cutting measures, a soft Japanese currency and solid sales in America offset a battering at home brought on by a paucity of products and the effects of a cover up of customer complaints.
?My personal summary for 2001: There is nothing to, let's say, exult about, but cost reduction is far ahead of schedule, processes are installed and optimization is on track,? said Rolf Eckrodt, chief operating officer and due to become chief executive next month, told a news conference.
Mitsubishi, which is Japan's fourth largest automaker and is 37.3 percent owned by the German auto giant DaimlerChrysler, also said that operating profit climbed to 40.23 billion yen, compared with a 73.87 billion yen loss the year earlier.
Results for both Toyota and Mitsubishi were within expectations. Toyota's results were in line with analysts' forecasts and Mitsubishi flagged a return to profit last week.
Mitsubishi, saying it was ahead in its cost-cutting targets, also joined Honda and Nissan in forecasting record profits for the current business year.
Largely thanks to expected strong sales in North America, it projected profit to climb to a record thirty eight billion yen, the largest amount since 1991/92, and forecast a ninety one percent rise in operating profit to seventy seven billion yen.
That was using a conservative estimate for the exchange rate, assuming an average of one hundred and twenty yen to the dollar for the period compared to the 125 yen used by other automakers.
Toyota was less forthcoming about the outlook for this year, saying only that it hoped for record earnings again.
Unlike most other Japanese companies it does not give numerical estimates for the year ahead.
It said, however, that it expected group vehicle sales, which include mini vehicles from Daihatsu Motor and trucks from Hino Motors, to climb by three and a half percent to 5.98 million units.
Shares in Mitsubishi rose on the earnings announcement, climbing by 2.31 percent to close at 398 yen.
Mitsubishi's shares have been the strongest performing of Japan's big five automakers for the year to date, rising seventy five percent on expectations of further restructuring under Eckrodt and hopes that DaimlerChrysler will boost its stake longer-term.
Toyota's earnings came after the close of trade.
The stock closed up 0.85 percent at 3,540, compared a 1.68 percent fall in the benchmark Nikkei average
In contrast to its strong earnings, Toyota's shares are the worst performing among Japan's big five automakers since September 11th, having fallen three percent on expectations that financial firms may unload their large shareholdings.
Cross-holdings, shares which are traditionally held to cement business ties, are now subject to mark to market accounting rules and banks are scrambling to cut their vulnerability to stock market swings as well as cover loan losses.
But in a move to counter potential oversupply, Toyota said it would seek shareholder approval to buy back up to one hundred and seventy million of its own common shares, or up to 600 billion yen worth.
?This should go a long way to easing market concerns,? said Takanori Matsuo, general manager of accounting.
Another Toyota official said that Japan's top banks now held between fifteen to twenty percent of the automaker's stock compared with over twenty percent at the end of March a year ago 2001.