Toyota Motor Corp. on Friday sharply downgraded its earnings forecast for this fiscal year through March, blaming a strong yen and the massive flooding in Thailand.
Japan’s biggest automaker expects to book a net profit of 180 billion yen ($2.3 billion), down 54 percent from the 390 billion yen it projected in August. It estimates leaner revenue of 18.2 trillion yen ($234.36 billion) from 19 trillion yen.
Toyota expects to sell 7.38 million vehicles worldwide this year instead of 7.6 million it predicted four months ago.
The maker of the Camry and Corolla sedans is on track to lose its title as the world’s largest automaker this calendar year. Toyota sank to No. 3 in vehicle sales during the first six months, trailing U.S. rival General Motors Co. and Volkswagen AG of Germany.
Toyota held off from releasing new earnings forecasts when it announced its first-half earnings results last month, citing uncertainties from the Thai floods that disrupted parts supplies.
It’s been a rough year for Japanese car makers, who were first hit with the earthquake and tsunami in March. They had largely rebounded from the disaster when they confronted the immense flooding in Thailand this autumn. Car production as far away as North America was scaled back as the creeping floodwaters put suppliers out of action.
The flooding, which was Thailand’s worst in half a century, will result in an output loss of 230,000 vehicles, said Executive Vice President Satoshi Ozawa at a news conference in Tokyo.
He told reporters the company had learned from its experience this year and that it would study ways to ensure that such unforeseen events “never again” lead to paralysis of supply chains.
But among Japan’s car makers, Honda Motor Co. has been the worst hit by the floods. It has yet to release forecasts as a result.
Compounding the pain is a strong yen, which hit multiple historic highs against the dollar this year. With jitters about European and U.S. economies, global investors have turned to the yen as a relative safe haven.
For exporters like Toyota, a strong yen reduces the value of overseas profits when repatriated and makes Japanese products less competitive on prices in markets outside Japan. Exports are a key driver of economic growth in a country that faces a rapidly aging and shrinking population at home.
Japanese manufacturers, including car and high-tech makers, responded by shifting more production abroad _ a trend that has government officials and the business community concerned about a hollowing out of Japanese industry.
“Because of the strong yen, the collapse of the foundation of Japanese manufacturing has begun,” Ozawa said.
Toyota’s new forecasts incorporate a 120 billion yen hit on operating profit from the Thai floods and another 190 billion yen from the negative impact of currency levels.
It now sees operating profit of 200 billion yen, compared with 450 billion yen in its August forecast.
The company lowered its foreign exchange assumptions to account for the yen’s appreciation over the last several months. It expects the yen to average 78 to the dollar this year, from 80 yen to the dollar in its previous estimate. It assumes 109 yen against the euro, down from 116 yen to the euro.
Toyota reports earnings based on U.S. accounting standards.
A funny thing happened here in the past few years. More young adults moved into the St. Louis region than moved out.
Not as many as in some so-called “cooler” cities, and maybe only because fewer people were moving in general from 2008 to 2010 as the nation wrestled with a deep recession and weak recovery.
But in each of those three years, according to new census data crunched by the Brookings Institution, on average, 870 more people age 25 to 34 came to the St. Louis area than left it. That is the opposite of what happened the previous three years and runs counter to the general trend of recent decades. After a long time spent watching young adults move away, and the St. Louis region slowly get grayer, a lot of people say this seems like progress pay day loans.
Wooing young people has been a big focus in recent years for the groups that try to grow St. Louis’ economy. Ranging from efforts by the Regional Chamber and Growth Association to St. Louis Mayor Francis Slay, “talent” initiatives and young adult councils have been launched in a bid to stem what some call a “brain drain” and spur fresh thinking in a place that is sometimes seen as stodgy and closed. Grass-roots groups have sprung up with the same ideas.
For an aging region, young adults are a sort of economic vitamin boost. People in their late 20s and early 30s are building careers and choosing where to settle down. Capturing them, and their talent, can mean a stronger workforce, which helps grow and attract companies
TORONTO
Toyota will begin taking orders Tuesday for the plug-in version of its hit Prius hybrid, announcing efficient mileage and a relatively affordable starting price of 3.2 million yen ($41,000), which comes down with green vehicle subsidies.
Toyota is targeting Prius Plug-in sales of 35,000 to 40,000 a year in Japan, and 60,000 globally. The car is set for delivery in Japan in January. With subsidies the cost comes down to 2.75 million yen ($35,200). It starts at $32,000 in the U.S. and 37,000 euros in Europe, according to Toyota.
Japan’s top automaker says the plug-in, which it calls the Prius PHV, is for those who want something more innovative than a regular gasoline-electric hybrid, but are worried about running out of power on the road, as can happen with pure electric vehicles.
When a plug-in runs out of power to keep the electric vehicle going, it becomes a hybrid.
“The plug-in is the premier next-generation ecological car that will follow the hybrid,” said Executive Vice President Takeshi Uchiyamada, the Toyota Motor Corp. engineer known as the “father of the Prius.”
The Prius Plug-in has an estimated electric vehicle cruise range per charge of 26.4 kilometers (16 miles), according to Toyota.
Its mileage is estimated at 61 kilometers per liter for Japanese test conditions, which converts to a whopping 143 miles per gallon. Such numbers vary depending on road conditions. Toyota is promising 87 mpg for the U.S. Prius Plug-in, which will be delivered starting in March. Orders are already being taken online in the U.S.
Green cars such as the Prius Plug-in are expected to take centerstage at the Tokyo Motor Show, which opens to the public this weekend.
Japanese consumers have taken to the Prius, despite a languishing auto market overall, thanks to government-backed subsidies. Nations around the world are offering similar perks, boosting its chance for success.
The Prius Plug-in, which seats five people, comes with a new lithium-ion battery that can be charged from a household outlet, much like an electric car. It also recharges itself while driving like a gasoline-electric hybrid. The battery is more powerful and compact so the back trunk fits three golf bags.
Uchiyamada told reporters that the plug-in was the best solution for green cars as most Japanese don’t drive more than 20 kilometers (12 miles) a day and Toyota studies showed that most people don’t want to use EVs for drives longer than 100 kilometers (60 miles).
How the plug-in fares in coming months will help show whether Toyota can keep riding on its success of the Prius as a global leader in green technology. Toyota said it had collected data from 600 people around the world who had leased the plug-in on a trial basis.
Toyota has sold more than 3.4 million hybrids worldwide so far, including models other than the Prius.
Selling in big numbers is important because it helps cut costs and allows the automaker to offer products at affordable prices.
Honda Motor Co., which has also been aggressive with hybrid technology, has sold 770,000 hybrids worldwide.
Nissan Motor Co., which hasn’t released a global hybrid sales number, is banking more on pure electric, selling 17,500 Leaf cars around the world so far.
In Japan, Toyota will work on services with its housing unit to support plug-in owners’ charging stations, it said.
Stock indexes closed at the highest point since the U.S. debt limit showdown in August Monday. The market was driven higher by a round of big corporate takeovers and reports that Europe’s bailout fund will be larger than originally thought. The Nasdaq composite turned positive for the year.
Netflix Inc. plunged 22 percent in after-hours trading after the DVD-by-mail and video streaming company forecast a sharp drop in fourth-quarter profits.
Investors are still waiting for a resolution to Europe’s debt problems. European leaders said they made progress at a weekend summit and plan to unveil concrete plans for containing the crisis by Wednesday.
The Dow was up about 40 points in the first hour of trading but moved steadily higher through midday following reports that Europe’s takeover fund will be greatly expanded. It finished with a gain of 104.83 points, or 0.9 percent, at 11,913.62.
“The market is expecting that there will be some kind of deal worked out Wednesday,” when European financial ministers are scheduled to meet, said Uri Landesman, president of Platinum Partners. “If there’s not a deal by then, the market is going down significantly.”
Even with concerns about Europe, U.S. companies are still reporting bigger profits. “Although there is a good deal of economic and political uncertainty in the world, we are not seeing it much in our business at this point,” Caterpillar Chief Executive Doug Oberhelman said.
The maker of construction equipment reported a 44 percent surge in income, more than Wall Street analysts were expecting, thanks to strong growth in exports. The company said it expected the global economy to continue recovering, albeit slowly. Caterpillar jumped 5 percent, the most of the 30 companies in the Dow.
The Standard & Poor’s 500 index rose to 1,254.19. That is just 3.45 points, or 0.3 percent, below where it started the year. It’s the highest close for the S&P 500 since Aug. 3, just as Washington was resolving a showdown over raising the country’s borrowing limit. If the S&P 500 finishes the year with a gain, it will be its biggest turnaround since 1984.
The Nasdaq composite rose 61.98, or 2.3 percent, to 2,699.44. The gains turned the Nasdaq positive for the year. The S&P 500 is the only major market index that remains lower than where it started the year.
The Russell 2000 index of small companies rose 3 payday loans.3 percent as investors moved money into higher-risk assets.
Netflix sank 21.6 percent post-market trading after forecasting fourth-quarter income that was far below what analysts were expecting. Through Monday’s close the stock had plunged 59 percent since July 12, when it raised prices and announced a plan to break its DVD-by-mail business into a separate company. The company abandoned the plan after it triggered a revolt among subscribers.
Other major U.S. companies due to report earnings this week include UPS Inc., Ford Motor Co. and Procter & Gamble.
Analysts expect companies in the S&P 500 to report earnings growth of 14 percent for the third quarter, according to data provider FactSet. They expect a 10 percent gain in revenue.
Expenses are also expected to climb. Higher costs for raw materials helped drag down income 8 percent at Kimberly-Clark Corp., which reported results Monday. The stock fell 5 percent. The company is a major consumer products maker whose brands include Huggies and Kleenex.
Higher costs also hurt cigarette maker Lorillard, which reported a 3 percent drop in income. Lorillard’s stock fell 0.6 percent.
A series of corporate deals helped lift the market, said Phil Orlando, chief equity strategist at Federated Investors. “This is telling us that companies think stocks are cheap, and they’re willing to spend some of the cash that’s sitting around on their balance sheets,” he said.
Deals announced included:
_ HealthSpring Inc. jumped 34 percent after Cigna Corp. said it will buy the health insurer for about $3.8 billion in cash. Cigna rose 1.4 percent.
_ RightNow Technologies Inc. gained 19 percent after Oracle Corp. said it will buy the tech service company for about $1.5 billion. Oracle rose 2.3 percent.
_ Mattel Inc. rose 2 percent after it agreed to buy Hit Entertainment, the owner of the Thomas & Friends and Barney brands, for $680 million in cash.
_ The J.M. Smucker Co. added 0.7 percent after it bought most of Sara Lee Corp.’s North American foodservice coffee operations for about $350 million.
Five shares rose for every one that fell on the New York Stock Exchange. Volume was average at 4.2 billion shares.
The Standard & Poor’s 500 index fell 1.6 percent early Tuesday, bringing it into what many consider to be a bear market. The yield on the 10-year Treasury note fell near a record low as investors piled into lower-risk assets.
Stocks fell broadly as investors worried that Greece might be edging closer to default, which would cause heavy losses for banks that hold Greek debt and rattle global financial markets. Greece has said it wouldn’t be able to make budget cuts it had agreed to as part of a deal to receive emergency loans.
The S&P 500 fell 20 points, or 1.8 percent, to 1,079 as of 10:15 a.m. That brought the widely used index 21 percent below its April 29 high of 1,363, meeting the criteria of a bear market.
The Dow Jones industrial average lost 207, or 1.9 percent, to 10,448.The Dow is 18 percent below its recent peak, just shy of the 20 percent decline market watchers consider to be a bear market.
The Nasdaq composite dropped 28, or 1.2 percent, to 2,307.
Bank of America fell 3.9 percent, the most of the 30 stocks that make up the Dow average. American Express Co. and General Electric Co. each lost 3 percent.
The yield on the 10-year Treasury fell to 1.72 percent, just above its record low of 1.71 percent reached on Sept. 22. Bond yields fall as prices rise.
In testimony before Congress, Federal Reserve Chairman Ben Bernanke said the economy is weaker than the central bank expected and that poor job growth continues to undercut consumer confidence. He warned Congress that deep spending cuts may impede a recovery.
In corporate news, Apple Inc. is widely expected to announce the newest version of its iPhone Tuesday. Tim Cook, who took over the company’s CEO role from co-founder Steve Jobs in August, is expected to unveil the new smartphone at Apple’s Cupertino headquarters. The company lost 0.6 percent in early trading.
Bank of America Corp. lost 7 percent to $5.15 as investors continued to be troubled by its exposure to soured mortgages securities and a several-day outage of its website. The company’s stock lost 9 percent Monday to $5.53, a level not seen since 2009.
European indexes also declined sharply. Benchmark indexes in Germany, France, and Spain each lost more than 3 percent.
The Greek government says an emergency conference call between Finance Minister Evangelos Venizelos and the country’s creditors could last until early Tuesday and be continued later in the day.
Global markets remained skeptical about Greek pledges to step up urgently needed reforms, and stocks in the U.S., Europe and Asia fell sharply Monday on fears Athens will default on its mountain of debt.
Greece’s international bailout creditors had stepped up the pressure at the start of a crucial week in Europe’s nearly two-year debt crisis, urging Greece to do more to heal its finances.
Creditors are threatening to cut the cash lifeline, which would force Greece to go bankrupt in less than a month.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
ATHENS, Greece (AP) _ Greece’s finance minister is holding an emergency teleconference with the country’s creditors hours after pledging to speed up reforms and civil-service staff cuts.
Global markets were skeptical about any of Greece’s pledges, however, and stocks in the U.S., Europe and Asia fell sharply Monday on fears Athens will default on its mountain of debt.
Greece’s international bailout creditors had stepped up the pressure at the start of a crucial week in Europe’s nearly two-year debt crisis, urging Greece to do more to heal its finances.
Creditors are threatening to cut the cash lifeline, which would force Greece to go bankrupt in less than a month.
Japan’s new prime minister has promised to restart nuclear plants following safety checks ordered after the crisis at the tsunami-damaged Fukushima nuclear power plant.
Prime Minister Yoshihiko Noda also said Tuesday in his first policy speech since taking office two weeks ago that the country should reduce its reliance on atomic energy over the long term, but offered no specifics.
More than 30 of Japan’s 54 reactors have been idled, causing electricity shortages amid sweltering summer temperatures.
Noda also said he would press ahead with the recovery of the tsunami-battered northeastern region, calling on his fellow citizens not to forget “the spirit of dignity of all Japanese” in the face of disaster.
Corporate culture doesn’t change overnight, Apple co-founder Steve Wozniak says in reflecting on the company’s post-Jobs future. But the signature Jobsian quirks might.
Google vice-president for engineering Vic Gundotra reflected Thursday on an urgent cellphone call from Jobs one Sunday to insist that the hue of yellow on one of the O’s in Google wasn’t just right.
“So Vic, we have an urgent issue, one that I need addressed right away,” Gundotra said Jobs told him.
“I’ve already assigned someone from my team to help you, and I hope you can fix this tomorrow. I’ve been looking at the Google logo on the iPhone and I’m not happy with the icon. The second O in Google doesn’t have the right yellow gradient. It’s just wrong and I’m going to have Greg fix it tomorrow. Is that okay with you?”
It was, Gundotra wrote on the Google+ site, “a lesson I’ll never forget. CEOs should care about details. Even shades of yellow. On a Sunday.”
Jobs’ legendary obsession with detail and secrecy were two ingrained Apple traits that some industry observers saw receding just a little the day after the 56-year-old founder stepped down as CEO.
The website AllAboutSteveJobs.com documented the cult of secrecy.
“Software engineers work on big boxes and hardware engineers never see the software that will run on their machines — less than a dozen people had actually seen an actual iPhone before Steve unveiled it at Macworld 2007.”
A Time magazine article described One Infinite Loop, the Apple Cupertino, Calif., headquarters, after Jobs returned as CEO in 1997:
“Executives feed deliberate misinformation into one part of the company so that any leak can be traced back to its source.” Employees “are monitored by cameras, and they must cover up devices with black cloaks and turn on red warning lights when they are uncovered.”
The other Steve – Wozniak, who with Jobs’ created Apple in Jobs’ parents garage in 1976 – said Being Steve Jobs took its toll.
“He really has had to sacrifice a lot to run Apple,” Wozniak told Byte.com shortly after Jobs announced that his role at Apple would be confined to Chairman of the Board.
“Steve needs now to just have some ‘Steve time,’ Wozniak said.
“He was surrounded by great, great people at Apple . . . and those people are still there,” Wozniak said. “I don’t think the core Apple culture will change because of (Jobs’) leaving, not for a long time.”
New CEO Tim Cook has been running Apple’s daily operations since January when Job went on his third medical leave. He’d first stepped up to the job in 2004, when Jobs was diagnosed with pancreatic cancer.
Cook, 51, was in charge when the iPad 2 was unveiled, when iCloud was announced, and when Apple, two weeks ago, briefly became the world’s most valuable company.
Before that, Cook restructured Apple’s manufacturing methods and its supply chain. He is, by all accounts, a logistics maestro.
“You kind of want to manage it like you’re in the dairy business,” he was quoted as saying in a CNN 2008 profile payday loans. “If it gets past its freshness date, you have a problem.”
And he has his own nascent cult of personality.
“In meetings he’s known for long, uncomfortable pauses, when all you hear is the sound of his tearing the wrapper of the energy bars he constantly eats,” CNN wrote. One executive was quoted as saying, “I’ve seen him shred people. He asks questions he knows you can’t answer and he keeps going and going.”
A tidy, often-repeated Cook story has him remarking at a meeting on Asia’s terrible distribution network, “Somebody should be in China driving this” and then, 30 minutes later, asking operations executive Sabihh Khan, “Why are you still here?” As the story goes, Khan left the meeting immediately to grab a plane to China, without even a change of clothes.
As low-key as Jobs is a showman, Cook has made clear he’s steeped in the philosophy of Apple, which he joined in 1998, when “the company was commonly thought to be on the verge of extinction,” he said in a 2010 commencement speech at his alma mater, Auburn University.
“The word ‘complete’ is not in our dictionary,” he said at the Goldman Sachs tech conference in San Francisco in 2010. “We’re innovators. Which means many times we end up ‘obsoleting’ ourselves.
“We say no to great ideas every day. And we do that in order to keep the amount of things we focus on very small so that we can put all our energy behind the ones we do choose.”
Steve Jobs’ Apple “has never been afraid to cannibalize its own business,” said MSNBC tech writer Wilson Rothman. “The iPhone eats more and more into iPod sales every quarter. The iPad is a low-prices alternative to a Mac. One of the things Jobs’s rivals will never be able to stomach is his ability to make his own products obsolete.”
Jobs helped change computers from a geeky hobbyist’s obsession to a necessity of modern life at work and home, and in the process he upended not just personal technology but the cellphone and music industries, the Associated Press reported.
The Apple II hit the market in 1977, making Jobs a multi-millionaire by age 25. The Macintosh exploded onto the scene in 1984 and then, in 1998, came the candy-coloured iMacs, which sold about 2 million its first year.
In this century, iTunes changed the way people bought music, and the iPhone changed the way they communicated. Jobs’ career, said The Mac Observer, has been “a revolution every other year.”
Indeed, the day before Jobs stepped down, a Japanese website reported Apple was working on a new Mac line that would be “completely different” from anything on the market now.
“No one can replace Steve Jobs, but (Cook) is good at what he does, which is make sure the right people have the right jobs,” said Jeff Gamet, managing editor at The Mac Observer.
“It’s not like as of today everything for Apple changes. It’s going to feel a little different, though, because Steve won’t have the CEO title.”
BANKS HEADQUARTERED IN ST. LOUIS AREA: A SNAPSHOT
Bad loans and
# of Return on Bad loans/ foreclosed property/ Tier 1
banks assets* total loans # total loans leverage ratio+
Q2 2010 77 0.47% 2.62% 4.21% 9.51%
Q3 2010 76 0.46% 2.86% 4.53% 9.52%
Q4 2010 75 0.33% 3.02% 4.65% 9.45%
Q1 2011 75 0.53% 3.16% 4.92% 9.51%
Q2 2011 74 0.56% 3.15% 5.1% 9.60%
* Return on assets: Profit as a percent of assets. The higher the number, the better. In good times, the figure is usually above 1 percent cash advance in one hour.
# Problem loans to total loans: The percentage of loans upon which payment is very delinquent. The lower the number, the better.
+ Tier 1 leverage ratio: A measure of a bank’s capital adequacy. The number must be at 5 percent or better for the bank to be considered “well capitalized.”
SOURCE: Federal Reserve Bank of St. Louis
Powered by WordPress -- XHTML 1.0