Toyota Q1 Profit Tumbles as Supply Constraints, Costs Bite
Toyota Motor Corp’s profit slumped a worse-than-expected 42% in its first quarter as the Japanese automaker was squeezed between supply constraints and rising costs.
As reported by Reuters, operating profit for the three months ended June 30 sank to 578.66 billion yen ($4.3 billion) from 997.4 billion yen in the same period a year ago, Toyota revealed, capping a tough period.
It has repeatedly cut monthly output goals due to the global chip shortage and COVID-19 curbs on plants in China.
The scale of the earnings hit was far beyond expectations – analysts polled by Refinitiv had estimated a 15% drop – and appeared to catch investors by surprise. Shares of Toyota, the world’s biggest automaker by sales, extended losses, sliding 3%.
“It’s extremely bad,” said Koichi Sugimoto, an analyst at the Mitsubishi UFJ Morgan Stanley Securities.
The automaker said rising material prices cost it 315 billion yen.
