TOKYO, Aug 4 (Reuters) – Toyota on Tuesday raised its annual operating profit forecast by 13% to reflect a weaker yen — the upward revision coming despite reporting a fifth consecutive quarterly earnings decrease on slumping sales in China.
The world’s largest automaker now expects 3.4 trillion yen ($21.6 billion) in operating profit for the current financial year to end-March, up from its previous forecast of 3 trillion yen.
“In addition to revised foreign exchange assumptions, we steadily accumulated improvements in our marketing efforts, including increased sales supported by the establishment of alternative logistics routes to the Middle East,” Toyota said in a statement.
The upbeat revision and the announcement of a share buyback failed to boost its stock, with shares in the automaker dropping 2.3% in afternoon trade.
Operating profit for the April-June first quarter declined 9% to 1.06 trillion yen, compared with a median forecast of 1.11 trillion yen in a poll of eight analysts surveyed by LSEG.
The revised annual profit outlook also did not take into account the impact of a deadly earthquake that struck Japan’s Kyushu island last month, disrupting production at suppliers and forcing Toyota to halt output at four domestic plants.
Toyota said it plans to buy back shares worth up to 1 trillion yen, equivalent to as much as 4.22% of outstanding stock. It also plans to cancel 200 million shares.
It raised its annual vehicle shipment target by 100,000 units to 9.7 million, citing solid demand in North America and Europe, among the few markets where Toyota reported sales growth during the April-June quarter.
($1 = 157.4900 yen)
(Reporting by Daniel Leussink; Writing by Miyoung Kim; Editing by Edwina Gibbs)
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