Japanese carmaker Toyota has reported a 47.6 per cent drop in quarterly profit, hit by slumping Japanese car sales and a firm yen that underlined its exposure to loss-making exports.
But the company has raised its 2011 outlook to slightly above the market consensus expectations as cost cuts take effect.
Toyota's October-December operating profit was 99.07 billion yen (£747m), down from 189.1 billion yen in the same period a year earlier. Net profit fell 38.9 per cent to 93.63 billion yen.
Its rival Nissan is also expected to suffer a drop in October-December profits and Honda has already posted weaker results for the period.
But Toyota’s decline is set to be deepest given its heavier exposure both to unprofitable exports from Japan and to the shrinking Japanese market.
"Compared with other Japanese automakers, Toyota has greater exposure to the domestic market and therefore is more subject to the negative impact of the country's slow economic growth," said Kazuyuki Terao, chief investment officer at RCM Japan.
Toyota exported more than half of its Japan-made vehicles last year, making a loss on many of them with the dollar well below the rate of 90 yen that President Akio Toyoda has said is the minimum to keep Japan's manufacturing sector competitive.
For the full year to March 31, the world's biggest automaker lifted its forecast for annual operating profit to 550 billion yen from a cautious 380 billion yen, after profits for the first nine months exceeded that figure.
Analysts have forecast annual operating profit of 489 billion yen for Toyota, trailing expected earnings at smaller rivals Nissan and Honda.
The carmaker also nudged up its global sales forecast to 7.48 million vehicles from 7.41 million, with domestic sales expected to reach 2.02 million vehicles compared with an earlier prediction of 1.99 million.
It kept its U.S. forecasts unchanged at 2.09 million units.
City A.M. Reporter