By Frank Williams
August 7, 2008 -
Toyota is beginning to feel The Big 2.8's pain. The world's largest automaker released their first quarter financial results. No question: they got dinged. While ToMoCo's books are not in the same universe as GM or Ford, the Japanese carmaker's operating profit dropped 39 percent to "only" $3.8b. That's just over half of the $6.2b they showed for the same quarter last year. Toyota Exec VP Mitsuo Kinoshita attributes the losses to a number of factors, including the weak U.S. dollar and the soaring price of raw materials. He's not too concerned over lease residuals and dropping used car prices, though. "With Toyota's traditionally prudent approach in lending, together with its efforts to further strengthen the credit control and collection system, the percentage of credit losses has shown some stability. As for residual values, Toyota will continue to keep a close eye on the used car market and set suitable values in a timely manner." This is the second consecutive quarter their operating profit has dropped. [source: Toyota Press Release]
Click here for First Quarter Operating Results and First Quarter Financial Summary
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POWERED
August 7th, 2008 at 9:17 am
ouch.
on the other hand, i’d rather make $4 billion than lose $15 billion.
they’ll be fine, even if their stock price tumbles a bit
August 7th, 2008 at 9:19 am
From WSJ today, Toyota is taking a 9 billion yen hit on lease depreciation. According to Google’s currency calculator, that’s a mere $82.4 million - pocket change. By comparison, the D2.801’s financial units each took over a billion dollar writeoff.
August 7th, 2008 at 10:01 am
Oh snap!
Another chink in the armour!
A write off isn’t a total loss.
August 7th, 2008 at 10:29 am
wow, that’s quite a drop. Since sales are only down in the single digits YTD, I think the weak dollar is cutting into Toyota’s profits. Which is probably why we’re getting a limited number of Prii. They can make much more profit on them elsewhere in the world.
August 7th, 2008 at 11:11 am
Hehe I like the implied zing at GM for their Got A Pulse? Financing.
August 7th, 2008 at 11:56 am
That is a big ouchie. No matter how your competitors are doing, losing operating margin is very painful. Two quarters of it is time for serious strategy review. In their case, not necessarily car-line strategy, but material sourcing and revenue repatriating strategy.
With the super weak dollar and rising material costs, they need to at least get a handle on one of them to stem the tide. 40% is massive and unsustainable. One more quarter like that and their credit rating will take a huge hit.
August 7th, 2008 at 11:59 am
Why are they releasing their “Q1″ numbers when everyone else is releasing their 2nd quarter results?
Typo?
Or is this the same type of “restatement” that Gm always gets slammed for?
August 7th, 2008 at 12:09 pm
Why are they releasing their “Q1″ numbers when everyone else is releasing their 2nd quarter results?
Typo?
Or is this the same type of “restatement” that Gm always gets slammed for?
You can put away your conspiracy theories. Toyota’s fiscal year goes from April to March. So Toyota’s first quarter runs from April 1 to June 30.
Not every corporation uses the calendar year as a fiscal year. It’s not a restatement of an earlier period, these are the results for the most recent period.
August 7th, 2008 at 1:54 pm
Only $4 billion in profit! Can you imagine what GM would do to Rick Wagoneer if they “only” had a profit of $4 billion.
August 7th, 2008 at 5:38 pm
if GM made $4b profit then they’d give all their executives a $200 million bonus so in the end they’d reflect a loss still.