UPDATE 3-Toyota could post 1st parent oper loss since founding

(Recasts, adds analyst and source comments, details)

TOKYO, Dec 19 (Reuters) - 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.


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. ($1=87.33 yen) (Reporting by Taiga Uranaka and Chang-Ran Kim; Editing by Chris Gallagher)