Toyota shares slide after bleak profit forecasts

By Chang-Ran Kim and Sachi Izumi

TOKYO (Reuters) - Shares in Toyota Motor Corp skidded on Friday after the world's biggest automaker forecast its first annual net profit decline in seven years as it faces a triple blow of a stronger yen, rising materials prices and a slowing U.S. economy.

Toyota's shares, which have roughly followed movements in the dollar-yen rate this year, ended down 3.3 percent at 5,300 yen, wiping $6 billion from its market value to $177 billion. They lost as much as 4.7 percent shortly after trade opened on Friday.

News of Toyota's bleak outlook and the dollar's fall below 104 yen sent shares of other Japanese automakers downhill. Honda Motor Co lost 3.9 percent, Nissan Motor Co shed 1.6 percent and Mazda Motor Corp sank 4.4 percent.

Many analysts viewed Toyota's guidance for a 27 percent fall in net profit this business year to be an ultra-cautious one that factored in the manifestation of every possible risk, and held onto their assessment that it was better-positioned than many to weather the headwinds.

"At the moment, Toyota is assuming the worst possible scenario," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. He added that the shares' fall was likely tempered by optimism that Toyota would lift its forecasts in mid-year.

Goldman Sachs analyst Kota Yuzawa agreed.

"Although it looks negative at first sight, we see the new guidance as a minimum level that factors in every conceivable risk," he said in a report, keeping his rating at "buy".

Still, Toyota executives on Thursday did little to quell concerns about the increasingly tough environment in the United States, where it makes just under half of its profit.