NEW YORK (CNNMoney) -- Toyota Motor took a $1.3 billion hit from the cost of the earthquake and tsunami that struck Japan in March, but the world's largest automaker said Wednesday it is moving to resume normal production sooner than previously expected.
The effect of the quake caused the company to miss its previously stated earnings target. The company said continued uncertainty about the lingering impact of the quake would prevent it from setting new production and sales targets for the upcoming 12 months, as it typically does at this time of year.
Toyota said production is expected to normalize in stages, starting in June both inside and outside Japan, rather than starting in July in Japan and in August outside its home country as it previously announced.
Production in June is still expected to down 30% from normal on a global basis, the company said.
"Toyota Motor Corp. () is carefully monitoring the situation in each region and for each vehicle model and is every day working its hardest to identify every way to restore production as much as possible," said the company's statement. "However, it is possible that during this period of adjustment in production, reduced production levels may have a significant impact on TMC's business results."
Even with the hit from the disaster in Japan, the company's operating income for the fiscal year ending March 31 rose to ¥468.2 billion, or $5.4 billion, from ¥147.5 billion, or $1.6 billion, on increased global sales. But that was far below the company's previous target of full-year operating earnings of ¥550 billion, or $6.4 billion.
The earthquake that took place just before the end of the quarter wasn't the only problem faced by the automaker. A rise in the value of the yen versus the dollar and euro made its cars more expensive in overseas markets and reduced the income it got from those sales.
It estimated the change in currency valuation during the year reduced income by about ¥290 billion during the year, or about $3.4 billion.
In addition, sales were hurt by recall and quality issues that arose in early 2010. Toyota's sales fell in Japan, North America and Europe during its fiscal year, even while industrywide sales rebounded in those markets. It took improved sales in emerging markets around the globe to allow it to post a modest 1.4% increase in the number of vehicles sold worldwide, although there was an overall drop in overall market share.
Recall and warranty costs increased by ¥30 billion during the fiscal year, even though many of the recall costs were incurred in the previous year. And those increased costs aren't expected to peak until later in this fiscal year. That cost estimate does not include legal expenses or lost sales from the recalls. The negative publicity from recalls caused Toyota to increase its spending marketing and cash-back offers to buyers in an effort to hang onto sales.
So even as high gas prices should be lifting sales for its fuel-efficient models, Toyota finds itself facing unusual struggles for a company that could seem to do no wrong just a couple of years ago.
"Toyota has been socked with one thing after another," said Edmunds.com senior analyst Michelle Krebs. "They had not yet recovered from last year's (recall) fiasco when the Japan earthquake knocked out some of its production."
|Apple shares soar on increased buyback|
|Regulators pave way for Internet "fast lane" with net neutrality rules|
|Stocks: Buoyed by Apple, Facebook earnings|
|What stumps Warren Buffett? Minimum wage|
|Obama fails to secure breakthrough in Japan trade talks|
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.28%||4.41%|
|15 yr fixed||3.30%||3.33%|
|30 yr refi||4.31%||4.39%|
|15 yr refi||3.35%||3.31%|
Today's featured rates: