Toyota Reports Profit. Prepare To Be Surprised

Bertel Schmitt
by Bertel Schmitt
toyota reports profit prepare to be surprised

Toyota has published its financials for the 2009 fiscal year that ended on March 31. The matter had been a center of speculations for months. First, a loss was predicted. Then, there were speculations that Toyota would report a slight gain, of $500m. Last weekend, Japan’s Yomiuri newspaper said the gain could be as large as $1.1b . They were all wrong. The official numbers are in. And the numbers are …

In a corporate communiqué, Toyota declared that “net income increased from a loss of 437 billion yen to 209.4 billion yen.” If my currency calculator is not mistaken, then that’s $2.26b, double the wildest speculations.

Also, it’s not EBIT, it’s cool net profit. In accordance with U.S. GAAP. (EBIT was 291.4b yen, or $3.15b.)

The surprising numbers are attributed to cost cuts and recovering auto sales.

Not too surprisingly, sales in the U.S.A., Europe, and “other regions” were down, balanced by strong sales in Japan and “Asia.” Global sales declined 8 percent on the year to 18.95 trillion yen ($205b). Consolidated vehicle sales for the fiscal year totaled 7.24m units, a decrease of 330 thousand units from the last fiscal year.

For the current fiscal year through March 2011, Toyota expects a conservative increase of 1 percent in unit sales, and a net profit of 310 billion yen, that’s $3.14b in today’s dollars. Toyota expects the yen to strengthen more against the dollar, and to fall against a recovering Euro. In their budget, the exchange rate is 90 yen to the U.S. Dollar (currently 92.4), and 125 yen to the Euro (currently 117).

According to The Nikkei [sub], Toyota “has not decided on its dividend payment.” Technically correct. However, Toyota’s press release says that Toyota ”also announced a cash dividend for the full fiscal year of 45 yen per share, to be proposed at the general shareholders’ meeting in June.” That’s the same as last year, and the proposal is unlikely to be shot down.

Toyota is not in a mood to spend their unexpected profits. The Nikkei [sub] says that Akio Toyoda announced that executives will receive a costly haircut. “To show our firm, renewed resolve to improve quality, we will forgo bonus payments for senior managing directors and higher-ranking executives this year, as we did last year,” Toyoda told The Nikkei.

“Representative directors will also return some of their compensation.” Let’s see whether that part of “The Toyota Way” will be copied by a U.S. board of directors.

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  • ZoomZoom ZoomZoom on May 11, 2010

    I'll buy a Toyota again. And I just recently decided to remove Ford from my buying and airport rental options. The Mike Roe radio and television commercials are stupid, condescending, and just plain annoying. Who the eff is this dude, and why does he strike me as a snake who just slithered off a dealer's lot? Yes, I have taken Ford off my list. I understand that the reason may sound superficial. But I assure you, it's my version of the "broken windows" theory. You see, if they get away with insulting and annoying the viewer/listener in their adverts (which have been going on for months now), then it stands to reason that they will not hesitate to make and sell an equally insulting and annoying product. I will re-assess in a year or three, whenever I decide I'm in the market. But if something happened to my current car, my next one will NOT be a GM, Chrysler, or now... a Ford. Just stop insulting us!

  • Steven Lang Steven Lang on May 11, 2010

    Point taken... and my apologies... On the flip side, an 8% decline is still a very nasty drop and I'm not quite convinced that the recent spate of bad publicity in the US had a minimal impact. In my market there were a slew of Toyotas traded in over the last few months. It's abated a bit for now. But Toyota no longer has the quality crown in the North American market.

  • MRF 95 T-Bird Back when the Corolla consisted of a wide range of body styles. This wagon, both four door and two door sedans, a shooting brake like three door hatch as well as a sports coupe hatchback. All of which were on the popular cars on the road where I resided.
  • Wjtinfwb Jeez... I've got 3 Ford's and have been a defender due to my overall good experiences but this is getting hard to defend. Thinking the product durability testing that used to take months to rack up 100k miles or more is being replaced with computer simulations that just aren't causing these real-world issues to pop up. More time at the proving ground please...
  • Wjtinfwb Looks like Mazda put more effort into sprucing up a moribund product than Chevy did with the soon to be euthanized '24 Camaro.
  • Wjtinfwb I've seen worse on the highways around Atlanta, usually with a refrigerator or washer wedged into the trunk and secured with recycled twine...
  • Wjtinfwb Surprising EB Flex hasn't weighed in yet on it being the subject of a recall...