In a surprising turn of events, leading automobile manufacturer, Toyota posted a 42% drop in its operating profits on Thursday. Covid19 restrictions on the Chinese factories and a global shortage of semi-conductors seem to be the cause of this dip.
The company’s operating profits for the three months ended June 30 dropped to 578.66 billion yen ($5.93 billion) as compared to its estimated average profit of 845.8 billion yen which was assessed by 10 different analysts. This is a huge drop in comparison to what was made last year in the 1st quarter.
The company had to slash production three times during the April-June quarter. The main reasons behind this were the shortage of semi-conductor chips and Covid-19 restrictions. This reduced the company’s initial production goal by 10%.
Despite this drop, the company is still sticking with its initial target for annual operating profits of 2.4 trillion yen in the 12 months through March 31, 2023. Toyota was already facing a dip of 0.5% in its stocks before the release of this report. After the news broke out, the company’s shares dunked down 2.7% at 2,097 yen by 0432 GMT. REUTERS.
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