Toyota Posts Record $8.78Bln Earnings

TOKYO -- Toyota Motor Corp. said Monday it powered to record earnings in 2001-02, while Mitsubishi Motors Corp. announced a profit for the first time in three years, rounding off a strong earnings season for Japan's carmakers.

Fueled by a weak yen and robust U.S. sales, particularly at its Lexus luxury vehicle division, Toyota said group operating profit leapt 29 percent to a record 1.12 trillion yen ($8.78 billion) in the year ended March 31.

That made Japan's biggest carmaker the country's second firm after mobile phone giant NTT DoCoMo to book an operating profit of 1 trillion yen for the year. DoCoMo posted an operating profit of 1 trillion yen, but also took huge appraisal losses on its overseas investments.

The automaker's recurring profit also topped 1 trillion yen at a record 1.11 trillion and net profit increased 30.7 percent to 615.82 billion yen, also a record.

"We had record profits across the board and we are very pleased with the results," executive vice president Ryuji Araki told a news conference.

Toyota is the third Japanese automaker to report record earnings for the period after Honda Motor Co. and Nissan Motor Co., which saw operating profits rise 57 percent and 67 percent, respectively.

But while Toyota, twice as big as its nearest domestic rival and overshadowing its peers in absolute terms, it lagged by other measures of efficiency such as operating margin.

Group operating margin was 7.4 percent, against Honda's 8.7 percent and Nissan's 7.9 percent.

"Toyota needs to use its large cash flow more efficiently and rationalize its platforms and models as Honda has done," said Hideo Ueki, executive director at UBS Asset Management.

Toyota's Araki said that Toyota should not be directly compared to it rivals.

"We are a different type of company. If you look at history, we haven't had the big swings from red to black," he said. "We've shown steady growth and that's how investors should look at our stock."

Profits for beleaguered Mitsubishi were more subdued, but no less welcome. Net profit, the first in three years, came in at 11.26 billion yen, compared with a loss of 278.14 billion yen the previous year.

Aggressive cost-cutting, a soft Japanese currency and solid U.S. sales offset a battering at home brought on by a paucity of products and the effects of a coverup of customer complaints.

"My personal summary for 2001: There is nothing to, let's say, exult about, but cost reduction is far ahead of schedule, processes are installed and optimization is on track," said Rolf Eckrodt, chief operating officer and due to become chief executive next month, told a news conference.

Mitsubishi, Japan's fourth-largest automaker and 37.3 percent owned by auto giant DaimlerChrysler AG, also said operating profit climbed to 40.23 billion yen, compared with a 73.87 billion yen loss the year earlier.

Results for both Toyota and Mitsubishi were within expectations. Toyota's results were line with analysts' forecasts, and Mitsubishi flagged a return to profit last week.

Mitsubishi, saying it was ahead in its cost-cutting targets, also joined Honda and Nissan in forecasting record profits for the current business year.

Largely thanks to expected strong sales in North America, it projected profit to climb to a record 38 billion yen, the largest amount since 1991-92, and forecast a 91 percent rise in operating profit to 77 billion yen.

That was using a conservative estimate for the exchange rate, assuming an average of 120 yen to the dollar for the period compared with the 125 yen used by other automakers.

Toyota was less forthcoming about the outlook for this year, saying only that it hoped for record earnings again. Unlike most other Japanese companies it does not give numerical estimates for the year ahead.

It said, however, that it expected group vehicle sales, which include minivehicles from Daihatsu Motor Co. and trucks from Hino Motors Ltd., to climb 3.5 percent to 5.98 million units.

Shares in Mitsubishi rose on the earnings announcement, climbing 2.31 percent to close at 398 yen.

Mitsubishi's shares have been the strongest performing of Japan's big five automakers for the year to date, rising 75 percent on expectations of further restructuring under Eckrodt and hopes that DaimlerChrysler will boost its stake longer-term.

Toyota's earnings came after the close of trade. The stock closed up 0.85 percent at 3,540, compared a 1.68 percent fall in the Nikkei average.