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Toyota Expected To Find Profits Despite Recalls

Fri, 05/07/2010 - 5:22am
Yuri Kageyama, AP Business Writer

TOKYO (AP) — Toyota Motor Corp., the world's top automaker, reports earnings for the fiscal fourth quarter on Tuesday.

WHAT TO WATCH FOR: Toyota is fighting a serious quality crisis, having recalled more than 8 million vehicles worldwide since October for gas pedal defects, a faulty floor mat and a braking software glitch.

But its U.S. vehicle sales, battered by the recalls and the slowdown following the 2008 financial crisis, have been gradually recovering, rising 24 percent in April, partly because of record incentives. And it is expecting to return to the black for the fiscal year ended March 31 with an 80 billion yen ($842 million) profit.

The manufacturer of the Prius hybrid and Lexus luxury models still faces a great deal of uncertainty, including class-action lawsuits in the U.S.

Toyota is also hoping to grow in China and other emerging markets, as it also tries to fix its reputation with American consumers. Toyota still boasts the strongest customer loyalty in the U.S., for the first quarter, according to auto information site Edmunds.com.

WHY IT MATTERS: How Toyota fares is a major influence on the auto industry landscape not only for the U.S. and Japan but also globally. Its stumble could prove an opportunity for rivals such as Ford Motor Co. and Hyundai Motor Co.

WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect, on average, a 124 billion yen profit for the fiscal year ended March 31, and a 122 billion yen profit for the fiscal fourth quarter.

LAST YEAR'S QUARTER: Toyota racked up a 766 billion yen loss for the January-March quarter last year, for a full-year loss of 437 billion yen, its worst annual loss since being founded in 1937.

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