Toyota forecasts $1.66-billion operating loss

Toyota Motor Corp. slashed its earnings forecast again today, projecting that it would report its first operating loss ever for the fiscal year through March on waning global demand and a surging yen.

"The change that has hit the world economy is of a critical scale that comes once in a hundred years," President Katsuaki Watanabe said at the company's Nagoya office. The drop in vehicle sales over the last month was "far faster, wider and deeper than expected."

Japan's top automaker forecast an operating loss of $1.66 billion for the fiscal year ending March 2009 — the first such loss since Toyota began reporting operating figures in 1941. Operating income reflects a company's core business performance and does not include income taxes and certain other expenses. Last fiscal year, Toyota had an operating profit of 2.27 trillion yen.

Sinking sales in the United States in the wake of the financial crisis have dealt a heavy blow to Japanese automakers. But Watanabe said that emerging markets, which had held up in the beginning, were also slowing down now.

The surging yen has battered profits as well by eroding overseas earnings when converted back to yen. The dollar has fallen to 13-year lows of about 90 yen recently.

Japan's top automaker also lowered its net profit forecast to just $555 million for the year through March 2009 — a tiny fraction of the nearly $19 billion it earned last year. Detroit Free Press

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