Toyota (TM) Dips Despite a Record Profit As Chip Shortage Weighs on Outlook

Shares of Toyota Motor Corp (NYSE: TM) are down about 1% in pre-open Wednesday after the Japanese car giant warned that the ongoing chip shortage will impact profit going forward.

Toyota reported an operating profit of 2.5 trillion yen ($22.93 billion) for the ongoing fiscal year to miss on the consensus of 2.88 trillion. As for the quarter to end-June, Toyota reported operating profit of 997.49 billion yen ($9.15 billion) to easily top the analyst estimates of 752 billion yen.

The company expects to sell 8.7 million vehicles this year, which is higher from 7.65 million it sold last year. Sales are already at the 2019 levels as EV sales continue to pick up.

“In the first quarter, we have seen the results of our improvement activities, despite the severe business environment. We will continue these activities in the future, but the situation is still unpredictable due to the expansion of Covid-19 in emerging countries, semiconductor shortage, and soaring material prices,” the car company said in a statement.

In addition to the chip shortage, Toyota also cited rising COVID-19 cases as a reason why it didn’t raise its profit outlook.

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