Toyota announces 39% profit drop for last quarter

Hit hard by falling sales of large SUVs and pickups in the United States as well as the effects of rising fuel prices and a worsening economy, Toyota has announced that its operating profit dropped 39% for the quarter ending June 2008. Key reasons cited for the poor result include slowing sales, rising raw material costs and a strong yen.

This is the first time in nine years that Toyota has experienced a decline in profit. The company registered an operating profit of ¥412.59 billion ($3.8 billion), down from an operating profit of ¥675.43 billion ($6.15 billion) a year earlier. This was also the second straight quarter that its operating profit had fallen, reports Automotive News.

This week the company also announced that it will lay-off up to 800 workers at a plant in Japan that builds SUV models for its Lexus brand as well as the Highlander SUV (pictured). Lexus has performed much worse than Toyota, with sales dropping 25% in the U.S. in July alone.

Toyota hasn’t adjusted its 2008 sales forecast and is still expecting to sell 9.5 million vehicles this year, however this figure was downgraded less than two weeks from 9.85 million vehicles predicted at the start of the year.

With this level of sales, the company is estimating a net profit of ¥1.25 trillion ($11.43 billion) and an operating profit of ¥1.6 trillion ($14.6 billion) for the year ending March 2009.