Toyota today announced that it is raising its earnings outlook and forecasts for a full-year profit, despite the estimated $2 billion cost of two high-profile recalls. The Japanese automaker reported a higher than expected $1.7 billion profit for the October-December quarter, compared to a loss of $1.7 billion a year earlier.
Toyota now expects a full year profit of about $890 million, compared to its previous forecast for a loss of $2.2 billion. Last fiscal year, Toyota lost $4.3 billion, its first annual loss since 1950.
Toyota’s worldwide recalls will end up costing it $2 billion, which only covers the stick gas pedal recall and not the floormat recall announced in late 2009. The $2 billion includes recall repairs costs at $1.1 billion and a loss of $770 million to $880 million in sales.
Toyota predicts that its vehicle sales will fall by 100,000 cars globally, 80,000 of which is expected to come from the United States.
– By: Omar Rana
Source: Detroit News