Toyota revenue to rise however eyes shall be on its shaky provide chain, EV technique By Reuters

By Satoshi Sugiyama

TOKYO (Reuters) – Toyota Motor (NYSE:) Corp is anticipated to report a small quarterly revenue enhance on Tuesday, with hovering prices of components and supplies practically offsetting the advantages from the plunging Japanese yen and a rebound in manufacturing.

The world’s greatest automaker by gross sales stated final week its international manufacturing rebounded by 30% within the quarter that led to September, however warned shortages of semiconductors and different elements would proceed to constrain output in coming months.

A gradual enchancment within the auto chip scarcity scenario ought to assist increase output within the second half of the present fiscal yr, however traders’ focus will shift to demand outlook, different potential disruptions within the provide chain and its electrical automobile technique when Toyota reviews earnings.

“The purpose to look out for is why there was such a niche within the provide chain course of,” stated Kohei Takahashi, an analyst at UBS Securities Japan, noting enchancment in chip provides.

“It has been too lengthy for a similar purpose, so one thing new have to be rising,” he stated.

Toyota warned earlier this month that it’s unlikely to satisfy its 9.7 million automobile manufacturing objective for this monetary yr resulting from a shortage of chips. It didn’t present a brand new forecast.

The corporate is anticipated to report a 3% enhance in July-September working revenue to 772.22 billion yen ($5.3 billion), its highest for the reason that December quarter, in response to the common estimate in a ballot of 12 analysts by Refinitiv.

Will probably be the primary revenue enhance in three quarters and mark a giant enchancment from a sharper-than-expected 42% plunge in June quarter revenue, partly helped by the yen which has additional prolonged its loss.

The yen plunged round 30% this yr in opposition to the U.S. greenback, boosting the worth of Toyota’s abroad gross sales. Toyota adjusted its yen forecast for the yr to 130 yen from 115 yen following the primary quarter outcomes, however the foreign money is now buying and selling a lot decrease at round 146 to the greenback.

The advantages of a budget yen has been offset by hovering enter prices. Toyota estimated in August materials price for the total yr to be 1.7 trillion yen, a 17% enhance.

Toyota’s shares are down about 2% this yr, in contrast with the roughly 4% drop within the common.

Toyota and its main Japanese rivals, Nissan (OTC:) Motor and Honda Motor, are additionally grappling with long term challenges together with their sluggish push into electrical automobiles.

Only a yr into its $38 billion EV plan, Toyota is already contemplating rebooting it to higher compete in a market rising past its projections, Reuters reported this month.

It additionally needed to recall its first mass-produced all-electric automobile after simply two months available on the market resulting from security considerations earlier this yr. It restarted taking leasing orders this month.

($1 = 146.4200 yen)