Toyota’s operating profit for the October-December quarter surged by 51.1% to 149.7 billion yen ($1.95 billion), which is stronger than expected. Toyota had raised its annual forecast on cost cuts and Japanese government subsidies however this is significantly below the expectations of analysts. The latest operating profit is considerably ahead of the average estimate of a slight drop to 93.9 billion yen by nine analysts by Reuters.
Its quarterly net profit fell by 13.5% to 80.9 billion yen. For the year to end-March, Toyota expects an operating profit (earnings from its core operations) of 270 billion yen ($3.5 billion), up from a previous 200 billion yen.
A poll by Thomson Reuters of 23 analysts revealed a consensus forecast of 331 billion yen. Its operating profit last year was 468 billion yen.
According to Toshiyuki Kanayama, the senior market analyst at Monex Securities, the revised profit guidance was slightly disappointing, saying that the market is looking at the next financial year. The key for Toyota shares is if its profit next year will increase to around 800 billion yen.
Last year, the floods in Thailand had hurt Toyota right as it was on the verge of recovering from a production loss that’s the result of the Japan earthquake last March. These floods made Toyota experience a 240,000 vehicles drop in output worldwide, pulling down 2011 global sales by 6% and permitting General Motors and Volkswagen to go beyond it in global vehicle sales.
Toyota has a market value of $135 billion (higher than the combined figures of Honda, Nissan and Suzuki). It expects an annual net profit, including earnings in China, of 200 billion yen – a major increase from the 180 billion yen it predicted in early December.