Toyota Motor Corp. (TYO:7203) said in its quarterly earnings report, which was released on Tuesday in Tokyo, that it would build 100,000 more vehicles in its current fiscal year, which ends in March, than previously predicted, largely due to robust U.S. demand.
The company reported that net income rose to ¥99.9 billion ($1.07 billion) in the three months ended on Dec. 31, a 23.5 percent gain compared with the same period the previous year. Earnings per share increased 22.3 percent to ¥31.55 on revenue of ¥5.3 billion.
Analysts polled by Thomson Reuters I/B/E/S had expected profits to be much higher for the quarter at ¥143.7 billion. Part of the reason for the poorer-than-expected earnings was the ¥90-billion price tag to settle a U.S. lawsuit related to unintended acceleration in up to 3.2 million of its vehicles, one of the largest class-action suits of its kind in history. The company also took a hit in its important China segment due to the Senkaku/Diaoyu territorial dispute between China and Japan, which led to sharp sales declines for Japanese automakers.
But these negative effects are coming off a record sales year for the auto giant, and it raised its vehicle manufacturing guidance for the fiscal year from 8.75 million to 8.85 million units worldwide.
"Virtually all of the metrics by which we define an automaker's performance improved dramatically for the company after a couple years of a roller coaster ride,” said Jesse Toprak, senior analyst at TrueCar.com.
Toyota also raised its net income forecast for its fiscal year, to ¥860 billion. Analysts polled by Thomson Reuters estimate the company will end its fiscal year with net income of ¥881 billion, up sharply from the ¥284 billion it earned in the previous fiscal year, due to the Tōhoku earthquake and tsunami that battered output for the carmaker the previous year.
A weakening yen has also helped bolster profits. Most of the vehicles Toyota makes in Japan are exported, so a stronger yen narrows margins for international sales.
Investors ignored how Toyota failedto meet the third-quarter earnings expectations of the seven analysts polled by Thomson Reuters, and instead they focused on the future rather than the hits to profitability the company took in the past.Shares in the company rose 2.58 percent to $97.83 in the Japanese company's ADR trading before markets opened in New York.
Angelo Young is a general assignment business reporter who joined IBTimes in April 2012. Much of his career has been behind the scenes as a copy editor, assignment editor and...