Zorce Jedi Master
Joined: 01 May 2005
|Posted: Sat Jul 31, 2010 4:42 am Post subject: Toyota set to report recovery in quarterly result
|Toyota Motor Corp., the world's largest automaker, reports its fiscal first-quarter results Wednesday.
WHAT TO WATCH FOR: Toyota, which makes the Prius hybrid and Lexus luxury model, is facing its worst ever crisis because of massive global recalls that have damaged its once glowing reputation for quality. The recall woes hit late last year as Toyota was about to start a gradual recovery from the sales plunge set off by the global financial crisis, especially in the key North American market. In recent months, it has seen sales pick up as the world economy recovers. For the fiscal year through March 31, Toyota posted a 209 billion yen ($2.3 billion) profit, a dramatic reversal from a 437 billion loss the previous fiscal year, the automaker's worst annual red ink since being founded in 1937.
WHY IT MATTERS: Toyota is expecting annual profit to rise 48 percent to 310 billion yen ($3.3 billion) for the fiscal year ending March 31, 2011. Sales are picking up dramatically in emerging markets. But some analysts say Toyota can no longer immediately hope for a return to the stupendous growth it enjoyed during its climb to the top until the financial crisis struck in 2008.
Weighing on its future is its precarious reputation because of the perception that it dallied in responding to the recall problems. Toyota has recalled about 8.5 million vehicles worldwide to address the possibility of unintended acceleration, replacing faulty floormats, sticky gas pedals and problem software.
The U.S. government has said unintended acceleration in Toyota vehicles may be tied to 93 deaths over the last decade and has fined Toyota a record $16.4 million for failing to promptly notify the government about defective gas pedals among its vehicles. Congress is weighing an overhaul of auto safety laws in the aftermath of the Toyota recalls. A lingering suspicion is that electronic defects may be behind the problems, although Toyota denies that. Its image may continue to be tainted by the hundreds of lawsuits that it faces in North America.
WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect Toyota to improve to a 480 billion yen ($5.5 billion) profit for the fiscal year ending March 2011. One analyst giving an estimate for Thomson Reuters expects Toyota to post an April-June quarter profit of 158 billion yen ($1.8 billion).
LAST YEAR'S QUARTER: Toyota reported a 77.82 billion yen ($819 million) loss for the April-June quarter last year, underlining the battering it took from the financial crisis.