Toyota Motor Corp, the world's top automaker, is likely to forecast a bigger operating loss of 700 billion yen ($7 billion) this financial year as global car demand stays weak, the Nikkei business daily reported on Friday.
The predicted loss, much bigger than a consensus estimate of a 387 billion yen loss from 20 analysts polled by Thomson Reuters, helped push Toyota's shares 2.2 percent lower.
Facing a global slowdown that has forced rival Chrysler into bankruptcy, Toyota is also likely to miss its earnings estimate for the past year by about 10 percent and report an operating loss of around 500 billion yen, the Nikkei said without citing sources.
Toyota, which is scheduled to report its results later on Friday, declined comment.
Consensus estimates have Toyota's operating loss for the year ended March 31 at 469 billion yen yen.
The economic crisis has dried up demand for cars, pushing Toyota from rapid expansion to overcapacity almost overnight.
While the whole industry is caught in the slump and selling cars from piled-up inventory, Toyota has been especially vulnerable due to its big exposure to the United States and Japan, where sales have plunged to multi-decade lows.
Domestic rival Honda Motor Co last week forecast a small profit for this year thanks to its relatively healthy motorcycle business.
But many others are running dangerously low on cash to stay solvent. General Motors Corp said on Thursday it burned $10.2 billion in the first quarter as it relied on a federal bailout to ride out a sharp decline in global sales.
Japan's Fuji Heavy Industries Ltd, of which Toyota owns a 16.5 percent stake, posted an operating loss on Friday of 5.8 billion yen for 2008/09 and said it expected a 35 billion yen loss this year, citing weak global car sales.
SALES SLIDE VS COST CUTS
The threat of job cuts is dampening consumer appetite for cars in the United States and Japan, and Toyota's sales for 2008/09 are believed to have fallen by a fifth to about 21 trillion yen, the Nikkei said.
Toyota is set to post a net loss of over 500 billion yen, 43 percent more than its most recent forecast, the paper said.
It is also likely to cut its annual dividend for 2008/09 to about 100 yen per share, down from a record high of 140 yen in the previous year, the newspaper said, in line with some analysts' estimates. It would be the first dividend cut since at least 1994, when it changed its reporting period.
Toyota is bleeding overhead costs after putting a third of its 74 global assembly lines on single shifts. It has said it wants to cut fixed costs by 10 percent, or roughly $5 billion, this financial year, through work-sharing, salary cuts and other steps.
It also plans to slash capital spending by at least 30 percent to below 1 trillion yen by delaying expansion projects until demand recovers.
Toyota is expected to ease some of the sales slide and production cuts with the launch of the third-generation Prius in the coming months. It remains to be seen, however, how much the popular model will contribute to profits after Toyota decided at the last minute to lower the car's price to bring it closer to Honda's new Insight hybrid model.
Shares of Toyota have risen 39 percent in the year to date, underperforming a 47 percent rise in Tokyo's transport sub-index.
(Reporting by Chang-Ran Kim and Mayumi Negishi; Editing by Michael Watson)