Toyota hammered with $7.7B loss last quarter
by Chris Shunk on May 8th 2009 at 12:32PM 
Last quarter's financial news has been brutal for all that have reported, but the biggest blow has just come from one of the world's most successful automotive powerhouses. Toyota has posted a last-quarter loss of $7.7 billion; the worst loss of the company's 71-year history and worse than even GM's just-reported loss of $6 billion. Toyota now expects to lose $5.5 billion for the year ending March 2010, surpassing the $4.4 billion it lost in the just-concluded year.
The reasons for Toyota's reversal of fortune is well documented. Global sales were down 21.9% last year, with the most stark losses occurring in the U.S. and Europe. The Yen also made strong advances against the U.S. Dollar, further hurting the Japanese automaker. While sales took a big dive during the last fiscal year, Toyota expects to lose another one million unit sales globally in the next year.
Even with Toyota's tremendous struggles, analysts expect it to emerge from the automotive downturn with far less stress than its domestic competition. Years of multi-billion dollar profits have fortified Toyota's balance sheet, giving the Aishi, Japan-based automaker far firmer financial footing.
To weather the downturn, Toyota has already laid off thousands of temporary workers worldwide, and it has also offered buyouts to American workers. The company also postponed construction indefinitely on its Mississippi assembly plant. It's also continued to pare down manufacturing costs, and will likely accelerate those efforts in the year ahead.
[Source: Toyota, MSNBC | Photo by Ramin Talaie/Getty]
PRESS RELEASE
Toyota Announces Year-End Financial Results
Tokyo - TOYOTA MOTOR CORPORATION (TMC) today announced operating results for the fiscal year ended March 31, 2009.
On a consolidated basis, net revenues for the fiscal year ended March 31, 2009 totaled 20.53 trillion yen, a decrease of 21.9 percent compared to the last fiscal year.Operating income decreased from 2.27 trillion yen to a loss of 461 billion yen, and income before income taxes, minority interest and equity in earnings of affiliated companies was a loss of 560.4 billion yen.Net income decreased from 1.72 trillion yen to a loss of 437 billion yen.
Operating income decreased by 2.73 trillion yen.Negative factors for the decline include 1.48 trillion yen due to the effects of marketing activities and 760 billion yen mainly from the appreciation of the Japanese yen against the U.S. dollar and the euro.
Commenting on the financial results, TMC President Katsuaki Watanabe said, "Both revenues and profits declined severely during this period.The negative impact was a consequence of the significant deterioration in vehicle sales particularly in the U.S. and Europe, the rapid appreciation of the yen against the U.S. dollar and the euro and the sharp rise in raw materials."
In fiscal year 2009, Toyota's consolidated sales totaled 7.57 million units, a decrease of 1.34 million units from the last fiscal year.
In Japan, vehicle sales were 1.95 million units, a decrease of 243 thousand units compared to the last fiscal year.Operating income from Japanese operations decreased by 1.68 trillion yen to a loss of 237.5 billion yen.
In North America, vehicle sales totaled 2.21 million units, a decrease of 746 thousand units.Operating income decreased by 695.5 billion yen to a loss of 390.2 billion yen including 73.9 billion yen of valuation losses from interest rate swaps.Operating income excluding the impact of valuation losses on interest rate swaps decreased by 713 billion yen, to a loss of 316.3 billion yen, mainly due to decreases in both production and vehicle sales.
In Europe, vehicle sales were 1.06 million units, a decrease of 222 thousand units.As a result, operating income decreased by 284.8 billion yen to a loss of 143.3 billion yen.
In Asia, vehicle sales were 905 thousand units, a decrease of 51 thousand units.Operating income decreased by 80.3 billion yen, to 176.1 billion yen.
In Central and South America, Oceania, Africa and the Middle East etc., vehicle sales were 1.44 million units, a decrease of 84 thousand units.Operating income for Central and South America, Oceania and Africa decreased by 56.3 billion yen to 87.6 billion yen.
In the financial services segment, operating income decreased by 158.5 billion yen, to a loss of 72 billion yen compared to the last fiscal year, including 80.2 billion yen of valuation losses from interest rate swaps.Excluding the valuation losses, operating income decreased by 146.3 billion yen to 8.2 billion yen.Higher outstanding loan balances and improved lending margins were offset by an increase in allowance for credit and residual value losses mainly in the U.S.
TMC estimates that consolidated vehicle sales for the fiscal year ending March 31, 2010 will be 6.5 million units, which is a decrease of 1.06 million units from the fiscal year 2009, due to continuance of the current severe conditions of each market.
Based on this assumption, TMC announced its consolidated financial forecast for the fiscal year ending March 31, 2010.Based on an exchange rate of 95 yen to the U.S. dollar and 125 yen to the euro, TMC forecasts a consolidated net revenues of 16.5 trillion yen, operating loss of 850 billion yen and net loss attributable to Toyota Motor Corporation* of 550 billion yen.
* "Net loss attributable to Toyota Motor Corporation" is equivalent to "net loss" up to FY2009
TMC President Watanabe commented on the outlook: "It appears to take some more time before the financial markets in the U.S. and Europe normalize and the global economy recovers.However, in the 2010 fiscal year, we plan to accelerate our profit improvement activities including the expansion of our hybrid vehicle line-up such as the next generation Prius in May and the Lexus' HS250h in July.All totaled, we plan to launch four hybrid models in Japan and three models overseas within this fiscal year.Through the reduction of variable and fixed costs, we estimate our total profit improvement in fiscal year 2010 will be around 800 billion yen.
For the mid-term, we plan to thoroughly analyze our customers' needs in each region and develop product line-ups which will focus on hybrid and compact vehicles with more cost reduction efforts.We will also concentrate on resource-rich and developing countries with the aim of providing high-quality, affordable and attractive models from the customers' viewpoint.In addition, we will continue to accelerate commercialization of next-generation technologies in the areas of environment, energy and safety including hybrids, plug-in hybrids, next-generation batteries, bio fuels and fuel cell vehicles.We also aim to establish flexible and effective systems in the areas of development, production and sales to respond to changes in business environment."
TMC also announced a cash dividend for the full fiscal year of 100 yen per share, a decrease of 40 yen over the last fiscal year to be proposed at the general shareholders' meeting in June.
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Reader Comments (Page 1 of 5)
Tricky dicky 12:38PM (5/08/2009)
impossible they turn on a dime...
p.s. lmao.
Reply
Vincenzo 1:14PM (5/08/2009)
How refreshing . . .Down Goes toyota . . Buy American
thomas 1:22PM (5/08/2009)
like a tundra?
Mr.Oak 1:53PM (5/08/2009)
Hey I called this last year, when they surpassed GM as #1. When the times are good, it's great to be #1. In bad times however, you're also #1 in the loss column.
Randy 1:57PM (5/08/2009)
This is just the beginning! Toyota is going to get a rude awakening! They no longer have an exclusive selling point.... (i.e high quality). Especially since Ford came out of nowhere with their high quality cars and trucks. So in a way.. .Moving Forward (the Toyo slogan) will be more like "Moving Laterally". I don't think they'll go anywhere. I just think Ford stepping up took away the mojo to both Toyo and Honda
Good for Ford... :)
Judy Zik 2:33PM (5/08/2009)
You can blame a fair amount of this on the Tundra. Truck sales are starting to show life but the Tundra is turning out to be an also ran and Toyota banked a lot of money on it being a huge hit. The FJ Fugly and Land Cruiser can't be long for this world with sales that are laughable and even the Toyota Fanboys at CR don't like the Yaris.
If you are down more than the overall market it isn't the market it is your product lineup. Toyota can't support a company of the size it has grown into on just Corollas, Camrys and RAV4s (their only models moving more than 10,000 units a month in the US). They are going to have to revamp a fair amount of product and cut down on the ridiculous number of models they have to keep their edge.
Fortunately for them the Japanese don't have the same views on Corporate Welfare so even though they are not in serious trouble their government will help them out anyway.
Smegley 2:41PM (5/08/2009)
...... "OUCH what a feelin! Toyota!"
Matt 3:04PM (5/08/2009)
Losing cash is what happens when you have largely inferior product accross multiple segments.
Sure, the economy has also contributed to it (duh) but so has their ghetto product.
Toyota Camry, anybody?
I remember a round-up a few years ago from I think Car and Driver with all the American-sold mid-size cars available at the time... and the only cars rated lower overall than the Camry were the Chrysler Sebring/Dodge Avenger. Which about sums it up, to me! ;)
http://whybuydomestic.wordpress.com/
Luis 4:08PM (5/08/2009)
The haters are fun to read. FWIW the Camry is still the best selling car in America. Corolla is still the best selling compact - in the world.
Go ahead, have your fun.
merlot066 8:14PM (5/08/2009)
@Luis
The F-150 is the best selling Vehicle (of any car, truck, or SUV) in the US for about 20 years in a row now and the best selling pickup truck for 31 years.
In my opinion (and I am a Ford guy) the Focus is a POS but it is holding strong around 4-5th best selling compact. The Explorer was the best selling SUV for 17 years in a row until last years gas crisis (and the refresh left it with a snooze box interior). The new Fusion will surely be a hit (more powerful, more fuel efficent, and it's gotten nothing but amazing reviews). The new Taurus, tell me that won't sell like crazy. Edge hybrid coming next year, Fiesta coming next year. F-100 hopefully comming next year. What does toyota have? Two snooze boxes that sell like crazy, and a bunch of other models that suck (Yaris, FJ Cruiser, Tundra)
tankd0g 10:35PM (5/09/2009)
Remind me again which automaker(s) are teetering on bankruptcy and which ones are in no immediate danger of failing.
LimeDaiquiri 12:39PM (5/08/2009)
Supra. MR2. Celica.
Thanks.
Reply
Visnick 3:52PM (5/08/2009)
+1
PhattyDre16 5:31PM (5/08/2009)
And how many of those do they currently sell?
Thanks.
Derek 7:09AM (5/09/2009)
Used car sales do not help Toyotas bottom line.
Personally, I think the list should go: MR2, 2000GT, Celica All-Trac, Supra
Colin Smith 12:43PM (5/08/2009)
Toyota's European offerings get uglier with every year that passes. In fact they have gone from bland to ugly, never touching interesting or characterful on the way.
The iQ is almost interesting, but not quite.
Reply
the_MVP_X 1:00PM (5/08/2009)
Not really, the euro Avensis looks pretty good, look at Toyota U.S., a ton of SUV's that nobody will buy, Toyota U.S.A. lost it's japanese spirit and become an american type giant car maker.
Colin Smith 1:40PM (5/08/2009)
Of course, cars suit their different environments, but believe me, the Avensis is pretty dull. There was a time when I could recognise any car at a distance, now I often have to get up close and check out the badges. Actually practically every saloon in this category is fairly dreary. Perhaps car design is just in a rut? Perhaps it's me??
Hey-ho.
dantronic 1:49PM (5/08/2009)
Same thing here in the US, friend. Ugly is popular here, Toyotas really litter the streets.
Luis 12:42PM (5/08/2009)
Toyota amassed billions upon billions of dollars in reserves in the boom years. They'll be fine.
Reply