Toyota Motor Co. (TM) posted weaker-than-expected full year results Wednesday and cautioned that profits in the current fiscal year are likely to fall sharply as the yen strengthens and sales stall.
The group forecast total vehicle sales of around 10.25 million for the current fiscal year, little changed from year ending in 2017, and net income of ¥1.5 trillion, a figure that fall significantly short of the FactSet consensus of ¥1.9 trillion.
Toyota based its projections, in part, on an average exchange rate of ¥105 against the U.S. dollar, a forecast that is 2.77% higher than last year and 12.5% higher than in the fiscal year that ended in 2015.
"I have said that we have entered the implementation phase of sustainable growth by pursuing our three main goals of making ever-better cars and developing people, which we improved during our intentional pause, taking up challenges for the future and reinforcing our management and financial foundation," said Toyota president Akio Toyoda.
"While there is no doubt that we need to continue these activities going forward, I feel that the outlook of our earnings for the current fiscal year, with neither the positive nor negative impact of foreign exchange rates, honestly present the current strength of our true selves," Toyoda added.
The world's second biggest carmaker behind Volkswagen AG (VLKAY) said net income fell 21.7% in the year ending in March to ¥1.831 trillion while operating margins slipped to 7.2% from 10%. Revenues were marked 2.8% lower at ¥27.6 trillion.
Toyota shares closed at ¥6,081 each in Tokyo Tuesday, after falling 0.88% on the session prior to the full year earnings release. So far this year, the stock has fallen 11.58% compared to a 4.11% gain for the Nikkei 225 benchmark.