(Recasts, adds analyst and source comments, details)
TOKYO Dec 19 Toyota Motor Corp (7203.T) is
likely to report its first annual parent-only operating loss
since the company was founded more than 70 years ago, hit by
plunging sales and the soaring yen, several Japanese media
reported on Friday.
Toyota is set to issue a revision for its parent and
consolidated forecasts at a year-end news conference on Monday,
the Chunichi Shimbun and Kyodo news agency reported.
Toyota, the world's biggest automaker, last posted an
operating loss in its first year of operation in 1937/38.
A Toyota spokeswoman declined to comment on the reports.
Toyota made a parent-only operating profit of 140 billion yen
($1.57 billion) in the first half after incurring currency losses
of 300 billion yen, making a full-year loss at current exchange
rates a near certainty.
Shares of Toyota were down a relatively tame 1 percent in
morning trade, in line with the Nikkei average .N225, as
conflicting reports emerged.
The Nikkei business daily predicted Toyota would also report
a consolidated operating loss for the full year, while the
Mainichi Shimbun newspaper said the company would not issue a
profit warning this month.
The Nikkei this week incorrectly reported that Japan's No.2
automaker, Honda Motor Co (7267.T), would lower its annual
operating profit forecast to about 300 billion yen, instead of
the actual 180 billion yen.
"Toyota has been expected to post (consolidated) losses for
the second half, but it would be a surprise if the loss became so
big that it would more than wipe out the first-half profits,"
said Koji Endo, auto analyst at Credit Suisse.
Toyota made a group operating profit of 582 billion yen in
the first half, and last month slashed its full-year forecast by
1 trillion yen to 600 billion yen.
PRESSURE IS ON
Automakers everywhere are under huge pressure to cut costs
as a global recession and tight credit strangle demand, and
Japanese carmakers are feeling the extra pinch from a weak
dollar/yen, now trading around 89 yen JPY=.
Credit Suisse's Endo said the pressure would only grow on the
automaker to cut costs, including procurement.
"Negotiations with Nippon Steel Corp (5401.T) and others will
begin early next year, and how much (price cuts) Toyota can
secure from raw material suppliers will determine whether it will
post losses for the next business year," he said.
Toyota said during its profit revision in early November that
it would do everything it could to meet the new forecast of 600
billion yen for the year, setting up an Emergency Profitability
Improvement Committee to secure short-term cash. [ID:nT171167]
But sales trends and currency rates have turned far more
severe and unpredictable. A company source said Toyota may alter
its plans and refrain from announcing sales and production
forecasts for the 2009 calendar year.
"We can't even see where demand is headed in the very near
term," the source said. "Is there really any sense in providing
projections for 2009?"
Toyota had been expected to lower its 2009 global sales
forecast, with various media estimating the figure at anywhere
between 8.0 and 8.7 million units, down from the record 9.37
million in 2007 and well below the company's most recent forecast
of 9.7 million.
(Reporting by Taiga Uranaka and Chang-Ran Kim; Editing by Chris