Toyota lifts profit forecast for 2012-13 fiscal year to JPY860 billion

Article by Anita Panait, on February 6, 2013

Toyota Motor Corp. has updated its net profit outlook to reflect an expected increase in net income for the fiscal year ending March 31, 2013. The Japanese carmaker now expects to post JPY860 billion ($9.3 billion) in net profit for its fiscal year, up from the previous guidance of JPY780 billion.

The carmaker’s revised outlook reflects improved demand in key markets like the United States as well as the improved profitability brought about to the weakening Japanese currency against the US dollar.

Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management remarked that if the current weak yen trend continues, the Japanese carmaker's profit will also probably jump for the next fiscal year. He noted that if a recovery in the US economy serves as a tailwind, Toyota’s stock price has “more upside.”

Toyota said that it expects to export 2.2 million vehicles in the US this calendar year, equivalent to an annual rise of 6 percent. Toyota, however, said it would not construct new plants over the next three years despite experiencing a rise in its global business.

Among Japan's big three carmakers -- Toyota, Nissan Motor Co and Honda Motor Co -- Toyota is expected by analysts to benefit the most from a weakening yen since it has the highest ratio of production in Japan, over half of which is exported.

Toyota’s Japanese operations, including domestic manufacturing for export, used to account for around half of the carmaker’s profit, but they began to experience losses following the Lehman Brothers crisis in 2008. The yen currently is trading around 92 to the dollar, compared with 78 at the start of October 2012.

Topics: toyota, profit

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