Crisis seen slicing Toyota profit, shares crumble
Fear that Toyota Motor Corp’s (7203.T: Quote, Profile, Research, Stock Buzz) profit will tumble drove its shares to their biggest one-day fall in two decades on Wednesday as the deepening financial crisis spreads through the global economy.
The world’s largest automaker is considering what would be a rare downward revision of its earnings outlook because of sluggish global demand and a firmer yen, a company source said on Wednesday, as the firm’s shares slid 11.6 percent.
The Nikkei business daily said Toyota was likely to post a 40 percent slide in annual profit, rather than the 30 percent fall it had forecast, missing consensus estimates.
Even before the Nikkei report, investors had worried over Toyota’s future earnings amid the threat of global recession.
“It’s still a surprise, nonetheless,” Mizuho Asset Management fund manager Yoshihisa Okamoto said (payday loan).
“Toyota is such a symbol of Japan’s manufacturing sector, and the fact that the company is likely to post an earnings decline of this scale has got to have a severe impact on investor sentiment.”
Shares in Toyota, which recently lost its spot as the world’s most valuable automaker to Volkswagen (VOWG.DE: Quote, Profile, Research, Stock Buzz), fell to 3,280 yen, underperforming a 9.4 percent tumble by Tokyo’s benchmark Nikkei average .N225. .T
Both the Nikkei and Toyota suffered their sharpest percentage fall since the 1987 stock market crash.
Filed under: money by Specialist