Toyota cuts earnings guidance as costs continue to rise

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Toyota Motor Corporation. expects its earnings to decline in the coming fiscal year due to rising material costs and other operating challenges facing automakers, including the continuing fallout from the COVID-19 pandemic, global political instability created by the war in Ukraine and the shortage of semiconductors.

Toyota Chief Financial Officer Kenta Kon speaks during the company’s recent full-year earnings press conference.

Shortage of dog makers

Chip shortages shut down plants in North America operated by Ford Motor Co. and Stellantis again this week. Meanwhile, Rivian CEO RJ Scaringe said during a call with analysts after the company reported a loss of $1.6 billion in the first quarterthe company’s production ramp-up was slower than expected due to shortages of critical semiconductors.

The nascent electric vehicle manufacturer produced 2,553 vehicles in the first quarter, delivering 1,227 units and generating $95 million in revenue. Officials noted that as of May 9, the company has made about 5,000 vehicles since production began last year.

Scaringe said Rivian is working closely with suppliers to ensure it has the components it needs to reach its goal of building 25,000 vehicles this year. The vote helped stabilize the value of Rivian shares, which sank to a new low following news of Ford’s decision to sell a block of 8 million Rivian shares.

Rivian's first offline nose
Rivian produced 2,553 vehicles in the first quarter due to a shortage of semiconductors, officials said.

Toyota downgrades outlook

Toyota said this week that operating profit for the fiscal year ended March 31 rose 36.3% to $23 billion in the latest fiscal year, the highest on record for a Japanese company, buoyed by a recovery in sales. pandemic sales and a favorable exchange rate against the US dollar.

Toyota’s net profit also rose 26.9% from a year earlier, as positive factors offset the negative impact of production disruptions caused by the global chip crisis and supply chain constraints.

Sales rose 15.3%, due to the good performance of business in the United States and Asia.

However, Toyota’s profit was down 31% in the January-March quarter from a year earlier, falling to $4.1 billion despite a 6% increase in sales revenue.

the guidance from Toyota executives for the new fiscal year it calls for a 20% drop in operating profit to about $17 billion. Rising material costs are expected to dent earnings, according to Toyota executives.

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