Toyota Surprises With Numbers, Waits For DOT Findings

Toyota’s Senior Managing Director Takahiko Ijichi had a surprise for the press that congregated today in the windowless basement conference room of Toyota’s downtown Tokyo office. They were invited to hear the results of the 9 month period from April to December. The scribes had prepared for the worst. As the numbers were released, some furiously begun retyping the prepared stories in which they had planned to insert the expected bad numbers before hitting SEND. Instead, Reuters reports: “The world’s top automaker posted a smaller-than-expected fall in third quarter profits and hiked its sales forecast for the year to March 31 by 70,000 vehicles to 7.48 million, thanks to better than expected sales in Asia, Japan and Russia.”

Toyota, like most Japanese companies, is on a fiscal year that goes from April to March the following year. Toyota reported an October-December operating profit of 99.07 billion yen ($1.20 billion). Net profit in the last quarter fell 38.9 percent to 93.63 billion yen ($1.13 billion).

For the nine month period, net revenues totaled 14.351 trillion yen ($174.73 billion). Operating income increased from 52.2 billion yen to 422.1 billion yen ($ 5.13 billion). Net income soared from 97.2 billion yen to 382.7 billion yen ($4.65 billion). The news conference was at 3pm, after the close of the Tokyo stock exchange.

Based on these numbers, Toyota raised its operating profit forecast to 550 billion yen ($6.68 billion) for the full fiscal year ending March 31. Toyota’s net profit guidance for the full fiscal was raised to 490 billion yen ($ 5.96 billion), up 130 percent. This is 140 billion yen ($1.7 billion) higher than the previous estimate.

How did they do it? The old fashioned way: Toyota sold more and spent less. What is still dragging them down is the high yen. Ijichi professed to be powerless as far as his currency goes. Help is near, courtesy of Japan’s bumbling government. The surging yen peaked in November. Ever since S&P changed it’s rating of Japan’s long term sovereign debt to AA- due to Japan’s high debt load and deflationary tendencies, consensus grows that the yen will go down against the dollar and especially against the strengthening euro.

While raising its forecast in most regions, especially in emerging markets such as Asia, Central and South America, and Africa, Toyota left its U.S. forecast unchanged at 2.09 million units for the fiscal. Toyota still plucks the feathers out of the tar it had been covered with in the U.S. last year.

The sun has set in Japan, but Toyota is keeping the lights on. Later today, the DOT will release the long awaited findings of the review of Toyota’s electronic throttles. NASA and NHTSA submitted Toyota cars to all kinds of electronic, electromagnetic and mechanical torture to exorcise any hiding ghosts in the machine. Nobody really expects they have found any. It they would have, it would have long leaked out.

“If they found something, I don’t think it could have been contained,” said Jeremy Anwyl, chief executive of Edmunds.com. Actually, the NHTSA would have been accused of delaying a recall campaign, reasons the LA Times: “If NASA engineers had found a defect, the government probably would have asked Toyota to issue a public notice and recall.”

Toyota has not received any advance information.

PS: For those who get a faster heartbeat by reading financial data translated from the Japanese, here the official results.