Strong Yen Cuts Toyota’s First-Quarter Profit 15%

Unfavorable exchange rates reduced Toyota Motor Corp.’s operating and net profits in April-June by 15% each to 642 billion yen ($6.3 billion) and 552 billion yen ($5.5 billion), respectively.

Japan’s stronger yen had a negative impact of 235 billion yen ($2.3 billion) on first-quarter results, according to the company. It says it was able to offset much of that erosion through cost-cutting efforts but plans further measures through the year.

Toyota now predicts its operating profit will plunge 44% to a four-year low of 1.6 trillion yen in the fiscal year that began April 1. The company also forecasts that currency fluctuations will negatively impact full-fiscal-year results by 1.1 trillion yen, up from its previous estimate of 935 billion yen.

Toyota’s vehicle sales in April-June rose 3% to 2.17 million units compared with the same period last year. But net revenue declined 6% to 6.6 trillion yen ($65 billion).

Regional net revenues in the quarter rose 4% to 1.2 billion yen in Asia. But they fell in Japan (-4% to 3.3 trillion yen), North America (-11% to 2.5 trillion yen), Europe (-3% to 623 billion yen) and 13% to 522 billion yen) in remaining markets.