Toyota Motor Corp’s (7203.T) profit slumped a worse-than-expected 42% in its first quarter; as the Japanese automaker was squeezed between supply constraints and rising costs.
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 said 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 poll by Refinitiv- a 15% drop and appear 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.
While production snarls had already been flag by the automaker, Sugimoto said some of the higher costs stood out.