Toyota Lifts Profit Outlook; Expanding Recall

Darlington Musarurwa
04 Feb, 2010
New York City

Toyota raised its profit outlook for the current fiscal year despite the worldwide recall that may include as much as 8 million vehicles. Toyota is likely to face at least 29 class action lawsuits in the U.S. and Canada. Sony narrows annual loss forecast. Mitsubishi UFJ Financial returs to profit.

[R]5:00 AM New York, 7:00 PM Tokyo – Toyota Motor raised its profit outlook for the current fiscal year despite the worldwide recall that may include as much as 8 million vehicles. Toyota is likely to face at least 29 class action lawsuits in the U.S. and Canada. Sony narrows full year loss forecast. Mitsubishi UFJ Financial Group returns to profit.[/R]

Japan stock indexes fell on concern that Toyota Motor Corp will expand its recall to include the latest Prius model.

The automaker’s global recall now covers nearly 8 million vehicles worldwide. However, Toyota later said that it cannot confirm the Nikkei news service report that Prius will be recalled.

Toyota faces 29 class action law suits in the U.S. and Canada that are linked to the sudden acceleration problem.

Investors also sold financial stocks as Mitsubishi UFJ Financial Group noted that bad loans were being worsened by rising commodity prices as global demand recovers.

In Tokyo trading Nikkei 225 Stock Average decreased 0.4% or 48.35 to 10,355.98 and the broader Topix Index fell 0.5% to 911.09.

In the first section of the Tokyo Stock Exchange 10.1 billion shares worth 775 billion yen were traded and in the second section 184 million shares valued at 2 billion yen changed hands.

Of the Nikkei 225 index stocks, 90 rose, 123 dropped, and 12 were unchanged. Unitika Ltd led gainers in the index shares with a rise of 5.8% followed by Konami Corp. jumping 5.6%.

Sony Profit Soars, Narrows Full-Year Loss

Sony reported today that its net profit rose to 79.2 billion yen in the December quarter from 10.4 billion yen a quarter ago as revenues advanced 3.9% to 2.24 trillion yen.

Analysts had earlier forecasted that profit in the period will rise to 33.7 billion yen.

Sony noted that the company’s profit were driven by a restructuring including closing 18% of its plants and shedding 20,000 jobs in order to save 330 billion yen in costs.

Sony’s profit at its network products and services business rose to 19.4 billion yen from a loss of 5.9 billion in the year-earlier period, while sales increased 1.9% to 606.1 billion.

Sales of the PS3 console advanced as the company slashed the price of its model with an 80-gigabyte hard drive by 25% to $299 in September.

The company now forecasts its fiscal year net loss to narrow to 70 billion yen from an earlier projection of a 95 billion yen loss.

Full year revenues are expected to remain unchanged at 7.3 trillion yen.

Toyota Motor Upgrades Profit Outlook

Toyota Motor Corp. reported today that it forecasts a group operating loss of 20 billion yen for the year through March from a 350 billion yen loss projected earlier.

The automaker is upbeat on the back of sales growth of environment-friendly cars. Sales are projected to slip 10% to 18.5 trillion yen from an earlier estimate of 18 trillion yen.

Full-year net income is expected to rise to 80 billion yen from a loss projection of 200 billion yen.

Revenues are expected to climb 2.8% notwithstanding a global recall of an estimated 8 million vehicles.

Mitsubishi UFJ Returns to Profit

Mitsubishi UFJ Financial Group reported today the company’s net profit rose to 217 billion yen in the nine months to December from 42 billion yen a year ago, while revenues dropped to 3.7 trillion yen from 4.35 trillion yen.

The lender maintained its full year net income projection at 300 billion yen.

Company restructuring and recovery in the U.S., Europe and Japan helped the results in the quarter.

Nikkei Movers

Oki Electric Industry Company, Limited led the decliners in the Nikkei 225 Stock Average with a loss of 7.3% followed by losses in JTEKT Corporation of 7.1%, in Denso Corporation of 6.2%, in Sharp Corporation 5.4% and in GS Yuasa Corporation 5.0%.

Unitika Ltd led gainers in the Nikkei 225 Stock Average with a rise of 5.8% followed by gains in Konami Corp 5.6%, in Nitto Boseki Co of 5.1% and in Pioneer Corp of 4.2%.

Other Movers

Asahi Holdings, Inc added 5.3% to ¥1,484.00 after the holding company was upgraded to “buy” from “neutral” by Ichiyoshi Research Institute Inc.

Dainippon Sumitomo Pharma Co., Ltd decreased 4.9% to ¥975.00 after the pharmaceutical company was downgraded to “sell” from “hold” at Citigroup Global Markets Japan Inc.

Funai Electric Co. plunged 14.8% to ¥3,985.00 after the company was downgraded to “neutral” from “overweight” at JPMorgan Chase & Co.

Hitachi Transport System, Ltd rose 3.4% to ¥1,239.00 after the transport company was upgraded to “positive” from “neutral” by KBC Securities.

NTT Data Corp. added 1.6% to ¥270,900 after the company was upgraded to “neutral plus” from “neutral” by Cosmo Securities Co.

Seikagaku Corp. advanced 5.7% to ¥1,010.00 after the manufacturer of materials used for pharmaceutical products was upgraded to “buy” from “neutral” by Ichiyoshi Research Institute Inc.

Sony Corporation fell 2.2% to ¥3,075.00 after the electronics and entertainment reported third quarter sales rose 3.9% to ¥2.24 trillion from ¥2.15 trillion a year ago. Net profit in the quarter rose 661% to ¥79.2 billion or ¥9.98 per diluted share compared to net profit of ¥10.4 billion or ¥78.76 per share a year ago.

Taiyo Yuden Co., Ltd fell 4.7% to ¥1,320.00 after the electronic components maker was downgraded to “neutral” from “overweight” at JPMorgan Chase & Co.

Toyota Motor Corporation fell 3.5% to ¥3,280.00 after the carmaker reported third quarter sales rose 10.2% to ¥5.3 trillion from ¥4.8 trillion a year ago. Net profit in the quarter was ¥153.2 billion or ¥48.86 per diluted share compared to net loss of ¥164.7 billion.