Toyota posts record profit despite pandemic, chip woes

TOKYO — Toyota Motor Corp. blasted past the global pandemic and microchip shortage to achieve record operating profit in the latest quarter on robust sales and cost control as it managed to keep the product pipeline pumping, despite assorted production challenges.

Operating profit surged to 997.4 billion yen ($9.14 billion) in the company’s fiscal first quarter ended June 30, from a 13.9 billion yen ($127.4 million) the previous year, when the worldwide auto industry was hit by the COVID-19 outbreak.

The results delivered a robust 12.6 percent operating profit margin for the most recent quarter, up from 0.3 percent a year earlier, as Toyota fortified its bottom line despite the global headwinds.

The automaker also said net income increased fivefold to 897.8 billion yen ($8.23 billion) in the April-June quarter, another record for fiscal first-quarter performance.

Revenue also reached a first-quarter record, soaring 72 percent to 7.94 trillion yen ($72.77 billion).

Global retail sales rounded out Toyota’s record results by jumping 49 percent to 2.76 million units.

Chip hit

Toyota said it lost global sales of 100,000 units in the quarter, due to the pandemic and the global microchip shortage.

The company said its sales would have been higher, if inventories were not so tight. It has been working with dealers in the U.S. to improve the flow of cars to lots.

Toyota credited robust sales and lower incentives, along with helpful foreign exchange rates for lifting results to levels on par with before the pandemic struck.

Still, the automaker kept its outlook unchanged for the current fiscal year, citing lingering uncertainty about flare ups of coronavirus infection and the ongoing bottlenecks for semiconductors.

Toyota predicts a rebound in global sales will underpin a 14 percent increase in operating profit and drive a modest 2.4 percent increase in parent-company net income.

Toyota expects global retail sales to increase 6.4 percent to 10.55 million units.

Revenues are expected to reach near record levels at 30.0 trillion yen ($274.93 billion), just shy of the all-time high of 30.2 trillion ($276.76 billion) in the fiscal year ended March 31, 2019.

— Naoto Okamura contributed to this report

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