July 6, 2020

Viacom and Time Warner Post Lower Revenue

Time Warner, the parent company of HBO, CNN, TNT and TBS, on Wednesday reported revenue of $6.9 billion in the quarter that ended March 31, down 1 percent from the same period last year. Net income grew 23.5 percent, to $720 million, or 75 cents a share, compared with $583 million, or 59 cents a share, in 2012.

Revenue at the company’s Warner Brothers studio fell 4 percent to $2.7 billion, while operating income increased by 23 percent to $263 million. “Both ‘Gangster Squad’ and ‘Jack the Giant Slayer’ fell below our expectations,” Jeffrey L. Bewkes, Time Warner’s chairman and chief executive, told analysts.

He remained optimistic however about the studio’s coming films, including “The Great Gatsby” and “The Hangover Part III.” Warner Brothers had a strong television season with “Revolution,” an apocalyptic drama on NBC, and “Game of Thrones,” the HBO fantasy series that averages 13.4 million viewers per episode.

Viacom felt the impact of a disappointing quarter at Paramount Pictures, which contributed to an 18 percent decline in earnings at the company, to $478 million, or 96 cents a share, versus $1.07 a share in the same three-month period last year. Overall revenue at Viacom fell 6 percent to $3.14 billion mostly because of the film division.

Revenue at Paramount dropped 20 percent to $941 million, a year ago, in part because of the company’s strategy to release only a handful of franchise films each year. Philippe P. Dauman, Viacom’s president and chief executive, said “the year ahead remains strong with audiences eagerly awaiting” releases like “World War Z” and “Star Trek Into Darkness.”

Both companies posted strong quarters in cable television. Mr. Bewkes specifically pointed to the success of Time Warner’s cable division, which benefited this quarter from the average nightly audience of 10.7 million for the N.C.A.A. basketball tournament broadcast on several Turner channels.

Viacom posted a 2 percent drop in operating income at its media networks, which include Nickelodeon, Comedy Central and MTV. Advertising revenue growth of 2 percent and improved ratings at Nickelodeon and Nick Jr. helped Viacom slightly surpass analysts’ expectations. “Nickelodeon rebounded with preschool audiences,” Mr. Dauman said. Combined revenue at the cable channels rose 2 percent to $2.23 billion.

Like Nickelodeon, Time Warner’s CNN cable network has also experienced ratings softness recently. Mr. Bewkes defended CNN under the leadership of Jeff Zucker, the recently named president of CNN Worldwide. But, he said, the channel still needed to evolve from a trusted source of breaking news to a more regularly watched outlet. “CNN can’t just be politics and wars,” Mr. Bewkes said.

Both companies are grappling with a changed television landscape. Online streaming services offered by Netflix, Amazon and Hulu are providing additional avenues of syndication revenue but also, in some cases, competition. Nickelodeon’s revenues had dipped last year in part because children were turning to Netflix to watch a deluge of episodes of “SpongeBob SquarePants.”

Mr. Dauman said Viacom was in “constructive discussions with several parties, including Netflix, concerning digital distribution” agreements beyond an agreement with Netflix that will expire later this month.

Mr. Bewkes rebuffed questions about whether the HBO Go on-demand app would be made available on an à la carte basis through a broadband connection, making the premium cable channel more like the streaming service Netflix. “We would do it if we thought it was in our economic best interest,” Mr. Bewkes said. “At this point, we don’t think it makes sense.”

This article has been revised to reflect the following correction:

Correction: May 1, 2013

A headline with an earlier version of this article misstated Time Warner’s results. It reported lower revenue, not lower earnings.

Article source: http://www.nytimes.com/2013/05/02/business/media/viacom-and-time-warner-post-lower-earnings.html?partner=rss&emc=rss

Sprint Narrows Loss but Loses Subscribers

Sprint, the No. 3 U.S. mobile service provider, on Wednesday recorded higher-than-expected revenue as customers spent more on wireless services.

Its first-quarter loss narrowed to $643 million, or 21 cents per share, from $863 million, or 29 cents per share, in the year-ago quarter.

Analysts expected a loss of 33 cents per share, according to Thomson Reuters I/B/E/S.

Macquarie analyst Kevin Smithen said Sprint was reducing costs faster than expected from their wind-down of the Nextel network, based on iDen technology.

“They’re beginning to reap the benefits of the iDen decommissioning,” Smithen said.

But subscriber growth in the Sprint-brand network was weaker than Smithen expected due to tough competition from bigger rivals and a new marketing push at smaller rival T-Mobile USA, a Deutsche Telekom unit.

Sprint added 12,000 customers to its network, compared with expectations for additions between 110,000 and 275,000 from four analysts contacted by Reuters.

Including the Nextel network, Sprint lost 560,000 subscribers compared with expectations for a loss of almost 525,000 from five analysts contacted by Reuters.

In comparison, biggest rival Verizon Wireless, a unit of Verizon Communications and Vodafone Group Plc added 677,000 subscribers in the quarter, and No. 2 U.S. mobile provider ATT Inc added 296,000.

“The ATT and Sprint results confirm that T-Mobile USA has been taking share in the last few months,” Smithen said.

Sprint’s revenue rose to $8.79 billion from $8.73 billion. Analysts had expected $8.71 billion.

The company now expects 2013 adjusted operating income before depreciation and amortization at the high end of its previously announced target of between $5.2 billion and $5.5 billion, excluding costs of closing strategic transactions.

Sprint’s board is evaluating a $25.5 billion acquisition offer from No. 2 U.S. satellite TV service Dish, which challenged Sprint’s October agreement to sell 70 percent of itself to SoftBank for $20.1 billion.

Sprint shares were unchanged in premarket trade after closing at $7.10 on the New York Stock Exchange. The stock has risen 14 percent since Dish announced its unsolicited bid on April 12 as investors bet that SoftBank could sweeten its offer.

(Reporting by Sinead Carew; Editing by Jeffrey Benkoe and Gerald E. McCormick)

Article source: http://www.nytimes.com/reuters/2013/04/24/technology/24reuters-sprint-earnings.html?partner=rss&emc=rss

Coke’s Profit Rises, but Shares Fall

Net income was $1.87 billion, or 41 cents a share, compared with $1.66 billion, or 36 cents a share, in the period a year earlier. Revenue rose 4 percent, to $11.46 billion.

But that was not good enough for Wall Street, where the company’s share price fell 2.7 percent, to $37.56.

“In some of the key markets in Europe, sales were down more than expected, and I think that’s got people spooked a bit,” said Jack Russo, a stock analyst at Edward Jones. “Consumers there are in a fragile state, and cold weather was an issue, too.”

Nonetheless, Mr. Russo said, the company reduced costs, which will continue to pay off this year, and commodity prices should be lower.

Muhtar Kent, chief executive of Coca-Cola, noted that it finished last year with record sales, operating income and cash on hand.

“We feel very confident moving forward into 2013 that we will continue to meet expectations as we did in the fourth quarter,” Mr. Kent said. “We have a portfolio of 207 markets, where when large markets, for one reason or the other, don’t perform as well, others continue to do well and help us meet our long-term growth targets.”

Last year, Coke’s sales jumped 16 percent in India and 8 percent in Russia, for example. While revenue from China slipped slightly in the fourth quarter, sales there grew 4 percent for the year.

Revenue from noncarbonated beverages continued to grow much faster than those from fizzy drinks, with tea brands like Gold Peak, Honest Tea and Ayataka, a green tea sold in Japan that became the company’s fifth billion-dollar brand added since 2010, increasing sales by 14 percent for the year. Sales of bottled water, which is less profitable than Coke’s other drinks, also were strong, growing 12 percent in 2012.

For the full year, Coca-Cola, which is based in Atlanta, had $48.03 billion in sales, compared with $46.55 billion in 2011. Profits were $9.2 billion, or $2.01 a share, compared with $8.9 billion, or $1.92 a share, a year earlier.

Article source: http://www.nytimes.com/2013/02/13/business/cokes-profit-rises-in-4th-quarter-but-shares-fall.html?partner=rss&emc=rss

The Media Equation: John Huey, Editor in Chief of Time Inc., Prepares to Leave

At the end of the year, Mr. Huey will vacate the office and leave his position as Time Inc.’s editor in chief. Martha Nelson, the editorial director of the company, will move in and become the first woman to hold the job.

Mr. Huey says he won’t miss the perch and I believe him, partly because the job now has brutal aspects. Besides, he is a reporter by nature, and seemed happy to be at-large whenever I saw him at events.

Mr. Huey, who had his start as a reporter at The Atlanta Constitution before heading to The Wall Street Journal and then Time Inc., is only the sixth editor in chief in the company’s history, a job that the writer Kurt Andersen once described as having “papal luster.” These days? Not so much.

“There’s been a fair amount of unpleasantness at that table,” Mr. Huey said, pointing to a big one in the corner. Rather than using it to plan magazine start-ups or acquisitions, he found himself going over lists of staff cuts necessitated by print’s collapse.

In his seven years as the top editor, the core magazines — like Time, Fortune, People and Money — have lost almost a third of their employees, and the future is no brighter. Overall revenue at Time Inc. fell 6 percent last quarter, to $838 million, although operating income increased 2 percent, thanks to the constant cost-cutting.

“Google sort of sucked all of the honey out of our business,” he said with a shrug, not complaining, just saying.

“When it was good, it was really good, but there were a lot of rough patches,” he said. “But I never wondered why I got into journalism during any of it. I still believe in the kind of storytelling we do here.”

But that confidence had limits. In the 11 years Mr. Huey helped run the editorial side of Time Inc. — first as editorial director, then as editor in chief — he commuted to his home and family in Charleston, S.C., on weekends, partly because he always felt he was on the cusp of being fired.

“There have been bullets flying since I got here, way back when I first came as a writer at Fortune,” he said, referring to his first job at the company, in 1988. “I came to work when it was just Time Inc., then it became part of Time Warner, and then it was Time Warner with Turner, and then it became AOL Time Warner and then just Time Warner again. I always figured my time might be up. Came close, but it never happened.”

As the editor of Fortune, Mr. Huey was a consummate magazine maker, turning out a product that was modern, knowing and highly decorated. A former naval intelligence officer, he displayed a remarkable understanding of how power operates in corporate America, which served him well as he navigated his way to the top of Time Inc.

“Media can be a very dangerous and political business — I am not an innocent in such matters, by the way — but I always had enough information to stay away from the more obvious hazards,” he said. “And we did O.K. We avoided major conflagrations, there were no $1 billion lawsuits, and no compromise in the journalism we were doing at our magazines.”

He had excellent relationships with Richard Parsons and Jeffrey Bewkes, the former and current chief executives of Time Warner, which came in handy, given that the leadership at Time Inc. became somewhat chaotic after the departure of Don Logan, the former chief executive of Time Inc. and a mentor of Mr. Huey.

Ann S. Moore, the chief executive when Mr. Huey became editor in chief in 2006, eliminated potential rivals and a lot of talent in the process. Jack Griffin replaced Ms. Moore in 2010 and quickly began remaking Time Inc. He grew tired of Mr. Huey’s resistance and took aim at him, according to executives at Time Warner, and was out after five months.

It fell to Mr. Huey, along with the company’s chief financial officer and its general counsel, to run the company until earlier this year, when Laura Lang, a newcomer to publishing, was selected as chief executive.

“It’s odd that a former newspaper guy ended up helping run the place, but it turned into a job for a ‘mudder,’ and I can run in the mud if I have to,” he said.

Approaching 65, he decided it was time to move on. He will not leave to a herald of trumpets, but he has had his wins: by some measure, Time and Money are the last players standing in their categories.

Mr. Huey installed a bureau in Detroit when the rest of the country was trying to forget about it, and he scrambled the jets so Time Inc. magazines had a presence in New Orleans after Hurricane Katrina.

He also brokered a deal with Turner Broadcasting to set up CNN/Money, which used the editorial content and staff of Money and Fortune to create a highly profitable Web site that makes more money than both those magazines. He was, in the main, an anchor for a company that often needed one.

“John is a very funny, self-deprecating guy, and none of that gets in the way of him being a very serious person,” said Daniel Okrent, who worked with Mr. Huey for many years. “He preserved the editorial independence of the magazines at a time when it was hard to resist the constant economic pressure to do stories that would help advertising.”

Now Mr. Huey is packing his stuff to prepare for a fellowship at Harvard. “I’m looking forward to getting back closer to the keyboard than I have been,” he said. Before he goes, he will probably slip Merle Haggard’s “Big City” into the CD player, an album whose title track frequently kept him company in his corner office.

I’m tired of this dirty old city.

Entirely too much work and never enough play.

And I’m tired of these dirty old sidewalks.

Think I’ll walk off my steady job today.

Gesturing at the magazines on the table, Mr. Huey said: “We still make a great deal of money because consumers pay us money for the products that we give them.”

“But I can’t look anybody in the eye who is coming into the business and tell them that they are going to end up in an office like this,” he added, with a wave at its expanse. “But who is to say that anybody should live like this anyway?”

E-mail: carr@nytimes.com;

Twitter: @carr2n

Article source: http://www.nytimes.com/2012/12/03/business/media/john-huey-editor-of-time-inc-prepares-to-leave.html?partner=rss&emc=rss

Media Decoder Blog: Cable Networks Help Time Warner’s Quarterly Profit

“Revolution,” a popular NBC show, was produced by Warner Brothers, a Time Warner unit.Brownie Harris/NBC “Revolution,” a popular NBC show, was produced by Warner Brothers, a Time Warner unit.

A strong quarter at Time Warner’s suite of cable channels contributed to a 1.9 percent increase in net profit for the third quarter, but revenue was offset by continued weakness at its magazine and movie divisions.

On Wednesday, Time Warner reported net income of $838 million, or 86 cents a share, compared with $822 million, or 78 cents a share, in the period last year. Revenue at the company fell 3 percent, to $6.84 billion.

The company’s networks division, which includes cable channels like TNT, TBS and HBO, reported its strongest quarter ever, with $1.22 billion in operating income, a 12 percent increase from 2011.

Revenue at the division grew 4 percent, to $3.34 billion, largely because of an increase in subscription revenue and in the number of subscribers to HBO.

Jeffrey L. Bewkes, chief executive of Time Warner, called the networks business the “highlight” of the quarter and said the strength of the cable channels “illustrates that our investments in content and technology are paying off.”

He pointed out that while NBC was being praised for its ratings turnaround in the fall season, most of the shows that have contributed to its success came from Time Warner’s Warner Brothers studio.

“The overall story is that the top two nonsports shows on NBC, ‘The Voice’ and ‘Revolution,’ are Warner productions,” Mr. Bewkes said.

One continued albatross for Time Warner is its CNN cable news channel, whose ratings have declined in recent months. But Mr. Bewkes praised the channel’s coverage of the presidential election and said it benefited from the political season. “CNN won the night last night,” Mr. Bewkes said in a conference call with analysts.

The third-quarter results for Time Warner show the same gap between divisions that exists at other major media conglomerates, including News Corporation.

Cable television remains a strong and lucrative business for these companies, while legacy publishing units continue to lag.

Ratings at TBS were up 35 percent in prime time for viewers aged 18 to 49, for example, while at subscription revenue at Time Inc. fell 6 percent and its advertising revenue fell 5 percent.

Overall revenue fell 6 percent, to $838 million at Time Inc., the publisher of People, Sports Illustrated and Entertainment Weekly among other magazines. Operating income at Time Inc. increased by 2 percent, to $126 million, largely because of cost-cutting.

The company’s Warner Brothers studio also had a sluggish quarter, mostly because of comparisons to the three-month period last year, which included revenue from hits like “Harry Potter and the Deathly Hallows: Part 2” and syndication revenue from “The Big Bang Theory.” Revenue at the film and television division fell 12 percent, to $2.9 billion, and operating income fell 37 percent, to $328 million.

Mr. Bewkes was bullish on the studio’s coming movie “The Hobbit” and said word-of-mouth had helped the suspense thriller “Argo” deliver solid box-office results. “Over all, I’m very confident about how we’re positioned heading into the next year and beyond,” he said.

This post has been revised to reflect the following correction:

Correction: November 7, 2012

An earlier version of this post carried an incorrect byline. The post was written by Amy Chozick, not Amy Harmon.

Article source: http://mediadecoder.blogs.nytimes.com/2012/11/07/cable-networks-help-time-warners-quarterly-profit/?partner=rss&emc=rss

DealBook: HSBC Sets Aside $2 Billion for Legal Woes as Profit Falls

I very much regret HSBC's past failures and I apologize for them, the British bank's chief, Stuart Gulliver, said.Jerome Favre/Bloomberg News“I very much regret HSBC’s past failures and I apologize for them,” the British bank’s chief, Stuart Gulliver, said.

HONG KONG — Profit at HSBC Holdings dropped nearly 9 percent in the first half of the year, as the big bank deals with the fallout from a money-laundering investigation and a settlement over selling inappropriate financial products.

On Monday, HSBC said that it had set aside $700 million to cover the potential fines, settlements and other expenses related to a money-laundering inquiry in the United States. The bank made a further $1.3 billion provision toward a regulatory settlement related to payment protection plans for credit card loans, home mortgages and other consumer borrowings.

The legal woes weighed on the company’s financial results.

HSBC announced net income of $8.4 billion in the first half the year, down from $9.2 billion in the previous year. HSBC’s operating income rose slightly, to $43.6 billion, over the same period.

“I very much regret HSBC’s past failures and I apologize for them. Our controls should have been stronger and more effective,” the British bank’s chief executive, Stuart Gulliver, said Monday. ‘”We are committed to doing whatever it takes to make sure the organization is able to detect and prevent unacceptable behavior.”

Even so, HSBC’s final legal bills could rise.

On Monday, Mr. Gulliver indicated there was “tremendous uncertainty” around the money-laundering case, and the “number could be significantly higher.” He called the $700 million provision “a best estimate based on the facts that we currently know.”

Earlier this year, the United States Senate Permanent Subcommittee on Investigations issued a report accusing HSBC of serving as a conduit for money flowing illegally into the United States from Mexican drug traffickers and Middle Eastern banks with ties to terrorists. An outside audit identified nearly 25,000 transactions related to Iran involving more than $19 billion, which were handled by HSBC’s American unit but were not properly disclosed to American regulators

HSBC has also been ensnared by the rate-manipulation inquiry, along with other big global bank. The multiyear investigation centers on benchmark rates, including the London interbank offered rate, Libor, and the Euro interbank offered rate, Euribor.

Last month, Barclays paid $450 million to authorities for submitting false rates. Global banks may have to pay more than a combined $20 billion in fines and penalties related the investigation, according to estimates from analysts at Morgan Stanley.

HSBC said that it had made no provision for potential fines or regulatory settlements related to the global investigation.

“It’s far too soon to make any estimate on Libor or Euribor,’’ Mr. Gulliver said. ‘‘We are providing information to various regulators simply because we are a panel bank, and therefore we don’t have any information that gives us any ability to make a provision for future costs that may result from anything do with Euribor or Libor.’”

Despite the continued legal problems, HSBC’s underlying businesses are showing signs of strength. During the first three months through June 30, the bank reported that pretax profit rose 28.1 percent to $8.42 billion compared with same period a year earlier.

According to HSBC, Asia continued to be an ‘‘absolute powerhouse’’ for the bank’s growth, accounting for half of pretax profit in the second quarter. Pretax earnings from Hong Kong and the rest of Asia rose 16 percent in the second quarter to $4.2 billion.

Since taking over as the bank’s chief executive in January 2011, Mr. Gulliver has focused on cutting costs, selling less-profitable businesses and focusing new investment on faster-growing economies of Asia.

Over that time, HSBC announced more than 36 deals to reduce or dispose of its stakes in a wide range of businesses around the world. Last week, the bank struck an agreement to sell its 44 percent share in Global Payments Asia-Pacific, a card processing joint venture, for $242 million.

In August 2011, the bank announced a plan to slash 30,000 jobs by 2013, part of an effort to cut costs globally by $2.5 billion to $3.5 billion. On Monday, HSBC said the number of full time staff globally had fallen to 272,000 people in the second quarter, down 8 percent from 296,000 people a year earlier.

Article source: http://dealbook.nytimes.com/2012/07/30/hsbc-sets-aside-2-billion-for-legal-woes-as-profit-falls/?partner=rss&emc=rss

That Remake of AOL? It’s Still Being Written

Last week it reported another loss and told Wall Street analysts it was not going to get much better: operating income for the year could be down as much as 20 percent because of weaker ad sales. The performance raised new doubts about whether AOL’s big bet on editorial content, including the acquisition of The Huffington Post news site, co-founded by Arianna Huffington, would reverse a decade-long decline.

The investor response to these disappointments was emphatic. The company’s shares lost a third of their value over two days.

“Frankly, AOL hasn’t delivered on its promise yet,” said Sameet Sinha, an analyst with B. Riley Company. “It’s just been a series of stumbles.”

Tim Armstrong, AOL’s chief executive, is confident that his company can regain some of its former glory. Despite the recent setback, he says he remains committed to rebuilding AOL and using The Huffington Post as the foundation.

“We believe that The Huffington Post acquisition is one of the best things we’ve done,” Mr. Armstrong said in an interview.

Mr. Armstrong, 40, is trying to remake AOL into a media powerhouse to offset the lost revenue from a steadily dwindling Internet access business. It’s a big site. More than 105 million unique visitors dropped in during July to use e-mail, catch up on celebrity gossip and check the weather. The strategy is just the latest formulated by a string of leaders at AOL, which merged with Time Warner during the Internet boom and then almost immediately started to struggle.

Mr. Armstrong, a former top ad executive at Google, joined AOL two years ago just before it regained its independence.

Fixing the company will take until 2013, he acknowledged. Meanwhile, he said he was spending up to $250 million of the $459 million the company had on hand to buy back its devalued stock. The gesture helped the shares regain some of their losses for the week. He has been spending heavily in the core products too. Since buying The Huffington Post in March for $315 million, Mr. Armstrong has added 17 new sections, like divorce, parenting and Latino issues. AOL is introducing international editions for Canada and Britain.

AOL also added 300 journalists to The Huffington Post as it shifted from its roots in aggregating coverage from others to writing more original news.

As leader of AOL’s content operations, Ms. Huffington is a crucial player at the company and the face of its content arm. She oversees established AOL sites like Stylelist, Moviefone and MapQuest along with more recent additions like the technology blog TechCrunch, acquired six months before The Huffington Post deal, for $25 million.

Ms. Huffington, 61, cited a number of journalistic high points since joining AOL, including a scoop that Gov. Chris Christie of New Jersey used a state helicopter to attend his son’s baseball game and a series on college students prostituting themselves to pay for tuition.

In terms of low points, The Huffington Post briefly suspended a writer last month who “over-aggregated” an article from Advertising Age by summarizing its contents too thoroughly. It underscored a frequent complaint that The Huffington Post steals traffic from publishers by rewriting articles to the point that it is unnecessary for readers to click on a link to the original source.

AOL lost $11.8 million in the second quarter compared with $1.06 billion during the same period a year ago, on $542 million in revenue compared with $584 million a year ago. Global advertising revenue grew 5 percent, the first gain by the company in overall advertising since it split from Time Warner.

Still, AOL executives conceded that they could have done a better job with search and domestic display ads. AOL’s display ad gains of 14 percent in the quarter were less than the 24.5 percent expected growth for the overall industry this year, according to eMarketer.

Last month, Mr. Armstrong also replaced his top ad executive.

AOL’s decline in value is so great that analysts point out that the company may be worth more now broken into pieces and sold. The Internet access business, in particular, would be good to unload, they say.

Other ideas include closing Patch, AOL’s local news initiative that has reporters in 850 towns. Eliminating the money-losing service would free $160 million and lift AOL into profitability.

Mr. Armstrong responded to such suggestions by saying that the long-term benefits of his strategy outweighed any short-term gains promoted by Wall Street analysts. High-quality content, he said, is the Internet’s future growth engine.

Meanwhile, AOL struggles to attract more visitors because of an eroding base of dial-up subscribers. The number of subscribers fell 21 percent in the last quarter to 3.4 million, for example.

Maintaining existing traffic numbers to its sites should therefore be considered a victory, Mr. Armstrong said. In July, all of AOL’s sites attracted 105 million unique visitors, 2 percent fewer than in the same month last year, according to comScore.

In contrast to the overall flat growth, traffic in The Huffington Post sites has grown around 12 percent since it was acquired, to nearly 35 million. But some of that gain is from shifting traffic from established AOL sites that were closed.

Ms. Huffington, who has a multiyear contract, said that she was as encouraged as ever by AOL, and that there remained more work ahead to integrate The Huffington Post with the rest of the company’s sites.

“I’m not going anywhere,” Ms. Huffington said. “I’m having a great time.”

Article source: http://feeds.nytimes.com/click.phdo?i=0cb92f924e0b358db4b3905093b437ba

After Quake, Toyota’s Profit Plummets 77%

Still, the automaker said it could not forecast earnings or production for the year ahead because of uncertainty about its ability to resume normal output levels.

Toyota said the disaster in Japan cut operating income by 110 billion yen ($1.36 billion) even though it occurred only three weeks before the end of the quarter.

The strong yen also hurt earnings in the period, when net income was 25.4 billion yen ($314 million ), down from 112.2 billion yen a year earlier.

Toyota’s operating profit declined 52 percent, to 46.1 billion yen ($571.5 million), less than half the 96.1 billion yen ($1.2 billion) that analysts had projected. Sales in the quarter fell 12 percent, to 4.6 trillion yen ($57 billion).

Results in the current quarter — the first period of its fiscal year, which started April 1 — are expected to take a much bigger hit because of the earthquake. Toyota is almost certain to lose its title as the world’s largest automaker this year, perhaps falling to third place behind General Motors and Volkswagen.

“With gas prices as high as they are — almost $4 per gallon — Toyota should be in a prime spot to win market share, but the supply simply isn’t there,” said Jessica Caldwell, director of industry analysis at Edmunds.com, a car-buying information site. “Toyota shoppers are starting to expand their consideration to other brands.”

Toyota said its production, which has been running at about 50 percent of normal globally and 30 percent in North America, would begin recovering in June across all regions of the world. Previously, it had said output would start to normalize in July in Japan and in August elsewhere.

It said production would continue to follow the schedule announced last month through June 3, then rise to about 70 percent of normal in June. It did not say whether plants would return to predisaster levels sooner than the November-to-December estimate given earlier.

The company said it hoped to release a sales and earnings forecast by the middle of June.

Toyota officials in the United States said North American output would climb to 70 percent of normal in June, and that production of eight models, including the popular Camry and Corolla sedans, would return to 100 percent at that time. It did not say when assembly of three models built in North America — the RAV4 and Lexus RX crossover vehicles and Tundra pickup truck — would return to normal levels.

In a statement, Toyota said it was “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” but that in the meantime, “reduced production levels may have a significant impact” on its financial results.

For the full fiscal year ended March 31, Toyota’s net profit grew 94 percent, to 408.1 billion yen ($5.1 billion), and operating income more than tripled, to 468.2 billion yen ($5.79 billion). Revenue rose 0.2 percent, to 19 trillion yen ($235 billion).

“Our business environment continued to be challenging due to yen appreciation among others,” Toyota’s president, Akio Toyoda, said in a conference call with analysts. “Nevertheless, we managed to improve our profit structure even further thanks to the support from all our stakeholders, in particular our customers.”

Article source: http://feeds.nytimes.com/click.phdo?i=59986c5f8fbf83f42f40b3258005dc22