(Bloomberg) — Toyota is scheduled to report April-June quarter results Thursday, with the focus on whether the carmaker will revise upward its profit forecast for the fiscal year through March.
The yen has been trading above 130 to the dollar since early June, which boosts the value of Toyota’s overseas sales when reported in its home currency. That will probably help Toyota, the worlds largest automaker, make up for any lost production due to semiconductor shortages, higher raw material costs and disruptions in China.
- Toyota’s current full fiscal-year operating income forecast is 2.4 trillion yen ($18 billion), a large gap from analysts’ average projection for 3.3 trillion yen. The biggest reason for the difference is Toyota’s conservative exchange-rate assumption of 115 yen to the dollar.
- One yen of weakness translates into about 45 billion yen in additional profit, according to the company. If Toyota revises its rate assumption, that could have a significant impact on the carmaker’s outlook.
- The negative impact of material price hikes for the fiscal year will probably be 1.45 trillion yen, according to Toyota.
- In its production plan in May, Toyota described the April-June quarter as an “intentional pause” to sustain growth and set realistic goals. There’s a chance that Toyota will revise its plan to assemble 9.7 million vehicles for the fiscal year due to lockdowns in Shanghai and a water supply shortage in Aichi prefecture, where many Toyota factories are based.
- Though the upward revision of its full-year forecasts is possible, the effect will be limited if the increase in profit forecast is merely based on the change of exchange rate assumption, said Bloomberg Intelligence analyst Tatsuo Yoshida.
- Toyota reports quarterly results at 1:25 p.m. local time on Aug. 4; no news conference planned.
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