Toyota Motor reported a worse-than-expected hit (42%) to quarterly operating profit as the Japanese automaker came under pressure from supply constraints and rising costs.
Operating profit for the quarter ended June 30 sank to 578.66 billion yen ($4.3 billion) from 997.4 billion yen a year ago.
It has repeatedly cut monthly production targets because of a global processor shortage and coronavirus restrictions at factories in China.
But the size of the profit drop was far short of what analysts had expected (a 15% decline) and appeared to surprise the market, sending the automaker’s stock down 3% after the results.
Despite the tough quarter, the automaker maintained its operating profit estimates for the year and its plan to produce 9.7 million vehicles this year.
First-quarter earnings were hit by supply constraints, lower sales and rising materials costs, a Toyota spokesman said.
Like other automakers, Toyota is grappling with higher costs and fears that global inflation could put a damper on consumer demand.
The Japanese company also cut monthly output targets three times during the April-June quarter, falling 10% below initial targets due to semiconductor shortages and the impact of restrictions in China.
Source: Capital
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