Toyota Motor reported a worse-than-expected 42% hit to quarterly operating profit as the Japanese automaker was squeezed by both supply constraints and rising costs.
Operating profit for the quarter sank to $4.3 billion (578.66 billion yen).
During the quarter, Toyota repeatedly cut monthly production targets due to the global chip shortage and COVID-19 curbs on plants in China.
The earnings haircut was far more than analysts expectations for a 15% drop.
Even with the results, the automaker is sticking with its forecast for full-year operating profit and its plan to produce 9.7 million vehicles this year.
Toyota missed its global production target for May.
The automaker’s production target had already been downgraded as China’s COVID-19 lockdowns and semiconductor shortages continued to impact business.
May was the third straight month in which production fell short.
In April, Toyota lowered its May production forecast by 50,000 to 750,000 vehicles due to China’s COVID-19 containment measures.
Toyota has its eye on concerns that global inflation could put the brakes on consumer demand.
Toyota shares, were down around 3% in Asian market trading.
Reuters contributed to this report.