Toyota Motor Corp. maintained its profit outlook for the current year. Toyota Motor Corp underscores the automaker’s concerns about its ability to produce vehicles amid parts shortages. Shortage rising material costs, and pandemic disruptions in China, even as a weaker yen boosts revenue in its local currency.
Toyota shares fell as much as 3.9%. The world’s largest automaker maintained its operating profit forecast of 2.4 trillion yen ($18 billion). Analysts project, on average, that Toyota will achieve a profit of 3.3 trillion yen.
Semiconductor shortages, higher raw material costs, and Covid-19-related restrictions in China have caused turmoil on car assembly lines around the world. Three months ago, Toyota said it would put in place an “intentional pause” in production during the April-June quarter to be more “in line with recent realities.”
Toyota sticks to its plan to assemble 9.7 million vehicles by the fiscal year. Blockades in Shanghai and water supply shortages in Aichi Prefecture also disrupted production in recent months.
The weaker currency helped boost reported revenue by 195 billion yen. It is rising material prices had a negative impact of 315 billion yen, according to Toyota.
Toyota updated its currency assumption to 130 yen to the dollar from 115 yen to the dollar. Previous prospects explained the gap between Toyota’s earnings opinions and analysts. The conservative earnings estimate suggests. Toyota still sees production challenges in the coming months. In total, operating profit for the fiscal year will receive a boost of 670 billion yen from the weaker currency, Toyota said.
A yen of weakness translates to about 45 billion yen in more profits, according to the company.
For the last April-June quarter, Toyota reported an operating profit of 579 billion yen on sales of 8.5 trillion yen. That compares with analysts’ average projection of a profit of 808 billion yen and revenue of 8.2 trillion yen.
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