Toyota Q2 Profit Falls 19% (TM)

Japanese automaker Toyota Corporation (ADR) (NYSE: TM) today reported a 19% drop in its second-quarter profit, mainly due to the yen’s appreciation against the U.S. dollar and production cutbacks which affected sales.

Toyota postponed a possible revision of its earnings forecast for the full year due to a number of reasons, including the uncertainty over production in Thailand. Back in August, the company said that it expects to a post a profit of $5.01 billion for the fiscal year ending March 2012.

CFO Satoshi Ozawa today said that a lot of negative factors have piled up one after another. Toyota’s production suffered following the massive earthquake and tsunami that hit Japan in March this year. Even as the automaker’s production was recovering from shortages, its output was once again impacted by component shortages due to the recent flooding in Thailand.

Toyota’s results have also been impacted by a stronger yen. The volatility seen in the financial markets since August has boosted demand for safe haven assets, pushing the Japanese yen higher against the dollar. Last month, the rising yen prompted the Japanese government to intervene in the currency market; however, the currency’s appreciation has already done a lot of damage to Japanese exporters.

Toyota cited the sharp rise in the yen as the main reason for a decline in profit. For the second quarter, Toyota reported a profit of yen 80.4 billion, down from yen 98.7 billion reported for the same period in the previous year. The company’s sales for the second quarter fell 4.8% to yen 4.575 trillion. Operating profit at the company’s underlying automotive business dropped 32% on a year-over-year basis.

Following the weak second-quarter financial results, Toyota ADRs fell to a new 52-week low of $63.53 in trading today. Toyota ADRs ended the day 1.33% lower at $64.61 on above average volume of 729,835.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.