Toyota's profit drops 77% after record quake slows sales

TOKYO -- Toyota Motor Corp., the world's largest carmaker, said fourth-quarter profit fell 77 percent to the lowest in six quarters after Japan's record earthquake disrupted production and crimped domestic sales.

Toyota reported net income of 25.4 billion yen ($314 million) for the three months ended March 31, compared with the 104 billion yen average of four analyst estimates compiled by Bloomberg in the past four weeks.

Sales fell 12 percent to 4.64 trillion yen, the company said. The output disruptions may cause Toyota to fall behind General Motors Co. and Volkswagen AG in global sales this year.

The natural disaster was another blow to President Akio Toyoda, whose first full year on the job was consumed by recalls of more than 10 million vehicles for problems related to unintended acceleration.

Toyota said today it expects domestic and overseas production to begin recovering in June, compared with an earlier forecast of July to August.

"Toyota's sales this year in regions like the United States and China, where sales are solid, may be hurt by the output losses," said Takeshi Miyao, an analyst at consultant Carnorama in Tokyo. "The earlier recovery is a sign that things are going more smoothly."

Toyota's June output will be about 70 percent of normal levels, the company said. Toyoda said 30 parts remain in short supply, compared with 150 in April.

Power shortages

The automaker's recovery may be hindered by power shortages in Japan after the March 11 quake and tsunami forced the nation to close nuclear power plants. The carmaker is working to restore full operations after the 9-magnitude temblor and tsunami that struck northeastern Japan damaged parts factories and power plants, causing shortages of components and electricity.

"We want to do our best in balancing the needs of the economy and the need to save power," Toyoda said today in Tokyo. Toyota's vehicle sales in Japan plunged 69 percent last month, leading the eighth straight drop in the nation's monthly auto deliveries, after the earthquake caused parts shortages and a government subsidy program ended.

Toyota resumed output at all Japan plants at half of normal capacity on April 18. All of the company's factories were closed for two weeks following the quake, with hybrid car production resuming March 28.

Resuming output

Toyota said it expects its global output to return to normal by November or December. Shortages of parts including electronic components, rubber and plastics are hampering the recovery.

Net income for the 12 months ended March 31 rose 95 percent to 408 billion yen as sales increased 0.2 percent to 19 trillion yen, Toyota said today. Like Honda Motor Co., Japan's third-largest carmaker, Toyota declined to provide an earnings forecast for the fiscal year started April 1, citing the impact of the earthquake on production.

Toyota may post 311 billion yen in net income for the year, according to the average of 11 analyst estimates. The Japanese carmaker's global output may decline to less than 6.5 million vehicles this year from 8.4 million in 2010, according to Koji Endo at Advanced Research Japan in Tokyo.

Global sales

Toyota's global vehicle sales dropped 12 percent from a year earlier to 1.79 million in the three months ended March 31. The decline was led by a 37 percent decrease in Japan. Sales in North America fell 12 percent to 551,000 while in Asia, excluding Japan, deliveries rose 23 percent to 345,000.

The carmaker may have lost output of 300,000 vehicles in Japan and 100,000 overseas through the end of April due to quake-related shutdowns, executive vice president Atsushi Niimi said April 22. Japan's automakers also face possible blackouts after the natural disaster reduced the nation's power-generating capacity by 8 percent. Chubu Electric Power Co., which supplies electricity to Toyota's factories in Aichi prefecture, decided earlier this week to shut a nuclear plant in Shizuoka prefecture, west of Tokyo.

Prime Minister Naoto Kan requested the shutdown until the plant's tsunami defenses are improved after the March 11 temblor triggered the biggest nuclear crisis since Chernobyl.

Honda said April 28 its fourth-quarter net income dropped 38 percent to 44.5 billion yen for the three months ended March 31. Nissan Motor Co., Japan's second-biggest carmaker, reports earnings tomorrow.