deepak pace
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Toyota Motor slashed its earnings forecast on Monday, projecting that it would report its first annual operating loss for the fiscal year through March — its first such loss since it began reporting results in 1941.
Battered by falling demand from consumers around the world and a surging yen, Toyota and other Japanese automakers have been reducing earnings outlooks and cutting workers.
"The change that has hit the world economy is of a critical scale that comes once in a hundred years," President Katsuaki Watanabe said at the company's Nagoya office. The drop in vehicle sales over the last month was "far faster, wider and deeper than expected."
Toyota forecast an operating loss of 150 billion yen ($1.66 billion) for the fiscal year ending March 2009. Toyota has never reported an operating loss since it began disclosing such figures in 1941. But it did have an operating loss in unofficial, internal calculations for the year ending March 1938 a year after the company was founded.
Operating income reflects a company's core business performance and does not include income [COLOR=blue! important][COLOR=blue! important]taxes[/COLOR][/COLOR] and certain other expenses. Last fiscal year, Toyota had an operating profit of 2.27 trillion yen.
Japan's top automaker also lowered its net profit forecast to just 50 billion yen ($555 million) for the year through March 2009 — a tiny fraction of the 1.7 trillion yen it earned last year.
Falling sales in the US in the wake of the financial crisis have dealt a heavy blow to Japanese automakers. But Watanabe said that emerging markets, which had held up in the beginning, were also slowing down now.
The surging yen has battered profits as well by eroding overseas earnings when converted back to yen. The dollar has fallen to 13-year lows of about 90 yen recently.
This is the second time Toyota — which makes the popular Camry sedan and Prius gas-electric hybrid — has reduced it annual earnings forecast this year. Initially, it had been projecting 1.25 trillion yen ($13.9 billion) in net profit for the year through March 2009, but last month it reduced that to 550 billion yen ($6.1 billion) before chopping it further Monday.
It also lowered the number of vehicles it expects to sell globally this calendar year to 8.96 million, down 4 per cent from a year ago,
Battered by falling demand from consumers around the world and a surging yen, Toyota and other Japanese automakers have been reducing earnings outlooks and cutting workers.
"The change that has hit the world economy is of a critical scale that comes once in a hundred years," President Katsuaki Watanabe said at the company's Nagoya office. The drop in vehicle sales over the last month was "far faster, wider and deeper than expected."
Toyota forecast an operating loss of 150 billion yen ($1.66 billion) for the fiscal year ending March 2009. Toyota has never reported an operating loss since it began disclosing such figures in 1941. But it did have an operating loss in unofficial, internal calculations for the year ending March 1938 a year after the company was founded.
Operating income reflects a company's core business performance and does not include income [COLOR=blue! important][COLOR=blue! important]taxes[/COLOR][/COLOR] and certain other expenses. Last fiscal year, Toyota had an operating profit of 2.27 trillion yen.
Japan's top automaker also lowered its net profit forecast to just 50 billion yen ($555 million) for the year through March 2009 — a tiny fraction of the 1.7 trillion yen it earned last year.
Falling sales in the US in the wake of the financial crisis have dealt a heavy blow to Japanese automakers. But Watanabe said that emerging markets, which had held up in the beginning, were also slowing down now.
The surging yen has battered profits as well by eroding overseas earnings when converted back to yen. The dollar has fallen to 13-year lows of about 90 yen recently.
This is the second time Toyota — which makes the popular Camry sedan and Prius gas-electric hybrid — has reduced it annual earnings forecast this year. Initially, it had been projecting 1.25 trillion yen ($13.9 billion) in net profit for the year through March 2009, but last month it reduced that to 550 billion yen ($6.1 billion) before chopping it further Monday.
It also lowered the number of vehicles it expects to sell globally this calendar year to 8.96 million, down 4 per cent from a year ago,
