Despite Recalls, Toyota Posts $1.6 Billion Profit in Japanese FY2010

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Despite facing a challenging fourth quarter and massive costs tied to global recalls, Toyota Motor Corporation announced it managed to post a fairly solid performance during the Japanese 2010 fiscal year, which ran from April 1, 2009, through March 31, 2010.

According to the automaker, its net revenues totaled 18.95 trillion yen ($205 billion), a 7.7-percent fall from last year. Still, the automaker managed to post a considerable turnaround. Although it posted a loss of 437 billion yen ($4.7 billion) in FY 2009, it posted an operating profit of 209.4 billion yen ($2.3 billion) in 2010, while simultaneously bolstering its operating income to 147.5 billion yen ($1.6 billion), a 608.5-billion yen improvement over last year.

Unsurprisingly, North America continued to be a stumbling block for the automaker. Although sales in its home country increased by roughly 10 percent, Toyota sold nearly 2.1 million vehicles in North America -- down 114,000 units from last year. Operating income for the market, however, didn’t dive. Cost-cutting measures and special items reportedly allowed the firm’s North American wing to report nearly 85 billion yen ($919.6 million) in profit -- a vast cry from the 390.2-billion yen ($4.2 billion) loss it incurred last year.

Despite the sales slip in North America -- and the speculation that the automaker’s balance sheet will be affected by additional costs tied to its rash of recalls -- executives believe Toyota will continue to grow in the coming fiscal year. Toyota predicts it will see moderate increases in sales worldwide (including North America) and rake in nearly 280 billion yen ($3 billion) in operating profit -- and many analysts believe those figures are conservative.

“There’s no change in the fact that we are in stormy waters,” Toyota President Akio Toyoda said during a news conference. “But now I feel that even in the storm, we can see a ray of sunshine.”

Source: Toyota

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