Toyota profits fall 42% due to rising costs and supply chain issues

TOYOTA

TOYOTA

Toyota's first-quarter profits fell 42%, surprising analysts and sending share prices tumbling.

The Japanese automaker made 578.66 billion yen ($4.35 billion USD at current exchange rates) compared to 997.4 billion yen ($7.5 billion USD) last year.

Analysts expected profits to fall 15%. The automaker's shares fell 3% after the announcement, reports Reuters.

Production issues prevented the automaker from making as many cars as planned. Toyota cut production three times in the first quarter of its fiscal year.

Due to supply chain issues, its quarterly production fell by 10%.

Toyota couldn't produce enough vehicles to meet demand, a spokesperson said.

The automaker expects production to pick up in the second half of the year as COVID restrictions are lifted in China and staffing issues are resolved.

Toyota faces inflation like the rest of the world. The automaker expects full-year material costs to rise 17% to 1.7 trillion yen ($12.7 billion USD).

Toyota's full-year operating profit forecast remains unchanged. It still plans to produce 9.7 million cars this fiscal year and expects strong sales due to high demand.