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Toyota Reports Quarterly Profits Gain of Two Percent

November 03, 2005 by Jeff Shepard

Toyota Motor Corp. (Nagoya, Japan) reported that profit rose two percent in the July-September 2005 quarter, lifted by growing sales around the world. The automaker reported that its group net profit for the fiscal second quarter rose to ¥303.7 billion (or $2.6 billion) from ¥297.4 billion the same period a year ago. Sales for the quarter rose nine percent to ¥4.97 trillion ($42 billion) from ¥4.5 trillion. The results put Toyota on pace to set a record net profit for the full fiscal year through March 2006 for the fourth straight year.

Toyota does not give consolidated forecasts, but it said that it expected to sell 8.03 million vehicles for the current fiscal year, up 60,000 vehicles from its August forecast, and above the 7.4 million vehicles sold the previous year. That annual figure for fiscal 2005 is still fewer than the yearly sales of General Motors Corp. (GM), but if trends continue, Toyota will overtake GM in the next few years. Toyota has already passed up Ford Motor Co. as the world's second biggest automaker.

For the fiscal first half, Toyota's profit dipped two percent to ¥570.5 billion ($4.9 billion, €4 billion) from ¥584 billion the same period the previous year. However, first-half sales surged 10 percent to ¥9.95 trillion ($85 billion, €71 billion) from ¥9 trillion the previous year. Vehicle sales for the six months climbed 7.5 percent to 3.83 million vehicles, from 3.5 million vehicles. Operating profit fell nearly seven percent compared to the same period a year ago as higher material costs and the shift in demand to smaller cars with lower profit margins squeezed earnings. During the first half, cost cuts added ¥60 billion ($512 million) and a favorable exchange rate added another ¥20 billion ($171 million) to Toyota's bottom line.