Earnings: Toyota | Federated | News Corp. | Northwest Air |

Toyota Profit Soars 39 Percent

TOKYO - (AP) - Toyota's profit in the January-March quarter jumped 39 percent as the world's No. 2 automaker marked its sixth straight record fiscal year of booming sales, the company said Wednesday.

Toyota Motor Corp. (TM) recorded a net profit of 404.1 billion yen ($3.6 billion) in the final quarter of fiscal 2005, up from 290.7 billion yen the same quarter the previous year.

Quarterly sales totaled 5.75 trillion yen ($51.6 billion), up 18 percent from 4.88 trillion yen a year ago.

With sales booming around the world, Toyota is on pace to overtake General Motors Corp. (GM) as the world's biggest automaker. Its models' reputation for good mileage has helped Toyota snatch U.S. market share away from GM and Ford Motor Co. (F) at a time when gas prices are soaring.

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Toyota said vehicle sales rose in every major region of the world except for Japan, where overall auto sales have stagnated lately. Toyota sold 7.97 million vehicles around the world in fiscal 2005, up from 7.4 million vehicles the previous year.

Toyota is banking on the success of fuel-efficient hybrid technology, which allows cars to switch between a gasoline engine and electric motor, to drive its global growth.

The company is due to roll out its hybrid Camry this summer, and it could be the vehicle that shows whether hybrids will join the mainstream.

In the United States, Toyota and its Lexus luxury division accounted for seven out of 10 hybrid sales in 2005, between the top-selling Toyota Prius, at 53 percent of all U.S. hybrid sales, and the Lexus RX400h crossover, at 9.7 percent.

Toyota said it expects to sell 8.45 million vehicles globally in the fiscal year ending March 2007, up 6 percent from fiscal 2005.

Detroit-based General Motors earned $445 million in the January-March period after a revision from an initial report of a loss for accounting changes. GM, which doesn't give yearly vehicle sales forecasts, sold 9.17 million vehicles last year.

While Toyota is on a roll around the world, analysts warn some risks may be ahead, such as the weaker dollar, which tends to erode the overseas earnings of giant Japanese exporters when converted into yen.

And indeed, Toyota, which in the past had not given group income forecasts, said profits are expected to dip 4.5 percent for the fiscal year through March 2007 to 1.31 trillion yen ($11.7 billion) on 22.3 trillion yen ($200 billion) sales, up 6 percent.

"The big question is whether Toyota will be able to maintain good profits efficiently while selling more cars," said Koichi Sugimoto, auto analyst at Nomura Securities Co. in Tokyo.

In fiscal 2005, a favorable exchange rate added 300 billion yen ($2.7 billion) to its books, while cost reduction efforts another 130 billion yen ($1.2 billion).

The company is forecasting the dollar to trade at 110 yen this fiscal year. It traded at about 113 yen in the fiscal year just ended.

Toyota's profit for the fiscal year through March rose 17 percent to 1.37 trillion yen ($12.3 billion) from 1.17 trillion yen the previous year, the fourth straight record income for Toyota. Sales for the year climbed 13 percent to 21 trillion yen ($188 billion), the sixth straight record.

Just about the only recent trouble Toyota has encountered is a $190 million sexual harassment lawsuit filed last week against the president and CEO of Toyota Motor North America, Hidetaka Otaka.

Toyota said Tuesday that Otaka, 65, has stepped down, although he claims he is innocent of the charges brought by Sayaka Kobayashi, his former personal assistant, who claimed he made repeated unwanted sexual advances.

Toyota President Katsuaki Watanabe said the case shouldn't have much impact on the company's business results.

In another shuffle, Toyota said Wednesday that Chairman Hiroshi Okuda, who oversaw Toyota's rise in recent years as a global automaker, will step down to senior adviser while staying on as member of the board.

Fujio Cho, former president and now vice chairman, who helped Toyota establish itself as a member of corporate America, replaces Okuda as chairman, the company said in a statement.

The move is unlikely to have a major impact on Toyota's strategy as Watanabe, who replaced Cho, has inherited the global growth strategy that was forged under Cho and Okuda before him.

Toyota is increasing production in various regions, such as a plant in Texas that begins production this year, as well as in China, where Toyota later this month rolls out its first Camry — the best-selling car in the U.S. — to meet auto demand there that's ballooning. Production expansions are also in the works in Canada, Thailand, Mexico, Russia and South Africa.

Toyota sold 2.6 million cars in North America, up from 2.3 million the previous year, and 880,000 vehicles in the rest of Asia, up from 833,000.

Toyota shares, which have gained 67 percent over the past year, dipped 0.7 percent to 6,680 yen ($60) in Tokyo shortly before earnings were disclosed.

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Federated Reports Loss

NEW YORK (Reuters) - Federated Department Stores Inc. (FD) Wednesday reported a quarterly loss on costs from its acquisition of May Department Stores, sending its shares down more than 2 percent.

Federated also stuck by its earnings outlook for the rest of the fiscal year, which is below the analysts' average estimates. The company has said, however, that forecasting for this year is tricky because of the uncertainties of absorbing May's business.

The parent of the Macy's and Bloomingdale's chains reported a loss of $52 million, or 19 cents per share, for the first quarter ended April 29, compared with a year-earlier profit of $123 million, or 71 cents per share.

Excluding merger integration costs, inventory valuation adjustments, and discontinued operations, Federated said it earned 2 cents per share. Analysts on average had been expecting 3 cents, according to Reuters Estimates.

Federated completed its $11 billion acquisition of May last year and is now absorbing the deal, running clearance sales, closing certain stores, and converting more than 400 May locations to the Macy's nameplate.

In the first quarter, Federated recorded $123 million in costs to integrate and consolidate May's operations into its own.

SAME-STORE SALES

Stronger-than-expected same-store sales at Macy's and Bloomingdale's drove the quarter's results, Federated said. Same-store sales are a key retail gauge that track sales at stores open at least a year.

Federated said first-quarter same-store sales were flat overall, compared with its forecast that they would fall 0.5 percent to 1.5 percent.

Revenue rose 63 percent to $5.93 billion. The results were within Federated's own forecast of $5.75 billion to $6 billion, but below the analysts' average expectation of $5.95 billion.

Federated said it expected earnings, excluding merger integration and inventory valuation costs and a gain on the sale of credit receivables, of 45 cents to 55 cents per share in the second quarter, compared with analysts' estimates of 60 cents.

For the full year, the company forecast profit of $3.50 to $3.75, while analysts were expecting $4.07.

Federated's first-quarter sales and earnings include results from the May stores, but sales and earnings from its Lord & Taylor and Bridal Group divisions, which it intends to divest, are treated as discontinued operations

The stock was down $1.85, or 2.3 percent, at $77.10 in morning New York Stock Exchange trading.

News Corp. Sees Profit Gains

NEW YORK (Reuters) - Media conglomerate News Corp. (NWS) Wednesday said quarterly profit doubled, as strong advertising at its television businesses outweighed profit declines for its films and newspapers.

The owner of the 20th Century Fox film studios and the Fox News Channel also said Wednesday it would increase its share buyback program to a total of $6 billion from the $3 billion announced in June 2005. (FOXNews.com is operated by FOX News, which is owned by News. Corp).

"This $3 billion step-up clearly reinforces our view that repurchases of News Corporation shares are among the best uses of our cash in today's environment," Murdoch, the company's chairman and chief executive, said in a statement.

News Corp. said net profit for the fiscal third quarter rose to $820 million, or 26 cents per share, from $400 million, or 13 cents a share a year ago. Operating income rose to $1.01 billion from $889 million a year ago.

Analysts on average had forecast earnings per share of 20 cents, according to Reuters Estimates.

Revenue rose to $6.2 billion from $6.04 billion, but was slightly below Wall Street estimates of $6.3 billion.

Strong ratings for its Fox News cable channel and the Fox broadcast network helped drive profit higher. Operating income from cable network programming rose 23 percent while its television business grew 29 percent.

News Corp.'s movie segment saw operating profit drop, however, to $225 million from $251 million a year ago, when the company was boosted by home video sales of its popular "Alien Vs. Predator" and "Napoleon Dynamite" releases.

Shares in News Corp., one of the fastest-growing media companies, have gained 15 percent since the start of the year, outperforming the S&P 500 Index by 9 percent, and hit a 52-week high of $17.95 on Tuesday.

Northwest Air Reports $1.1 Billion Net Loss

CHICAGO (Reuters) - Northwest Airlines, which filed for bankruptcy in September, reported a first quarter net loss of $1.1 billion on Wednesday, hurt by reorganization costs and rising fuel prices.

The carrier said it had a first-quarter net loss per share of $12.65. A year ago the company reported a net loss of $537 million, or $6.19 a share.

Excluding reorganization and other costs, the carrier said it lost $129 million in the first quarter, compared with a loss of $450 million in the year ago quarter.

The airline said it spent $975 million on reorganization items.

Northwest said operating revenue rose 3.3 percent to $2.9 billion.

The carrier ended the quarter with $1.28 billion in unrestricted cash and short-term investments.