Toyota predicts operating loss

Japanese car giant Toyota has said it expects an annual loss in operating income for the first time since it began reporting the figures in 1941.

It forecast an operating loss of 150 billion yen (£1.12 billion) for the financial year ending next March, compared with an operating profit last year of 2.2 trillion yen (£17 billion). The surging yen has battered profits by eroding overseas earnings.

Operating income reflects a company's core business performance and does not take into account income taxes and certain other expenses.

Katsuaki Watanabe, Toyota's president, commented: "The change that has hit the world economy is of a critical scale that comes once in a hundred years."

He added that the drop in vehicle sales over the past month was "far faster, wider and deeper than expected".

Toyota has also reduced its annual net earnings forecast - for the second time this year - to just 50 billion yen (£375 million) for the year to the end of March 2009.

At the same time, it lowered the number of vehicles it expects to sell globally to 8.96 million, down 4% from a year ago.

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