Earthquake and tsunami hit Toyota profits

The Mar. 11 earthquake and tsunami in Japan killed tens of thousands of people, devastated large parts of the country, and has severely affected the world's third-largest economy.

That last point was underscored today by Toyota, the world's biggest automaker and a symbol of Japanese manufacturing might.

The company says quarterly profits fell 77 percent to 25.4 billion yen (about $302 million), as the disaster has so far cost Toyota $1.3 billion. The strong yen also pressured the company's sales in the past three months.

But there was a bit of better news, too.

Toyota says vehicle production, which has been running at about 50 percent of capacity, would begin recovering in June across all regions of the world. That's a month earlier than previous forecasts.

In a statement accompanying today's results, Toyota said it is “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."

The company also warned that "reduced production levels may have a significant impact” on its financial results this year.

For the full fiscal year that ended Mar. 31, Toyota's profits actually rose 94 percent to 408.1 billion yen ($5.1 billion).

Of course, Toyota was struggling to overcome several quality control problems, even before the disasters struck Japan.

Analysts said the combined effects of these problems will likely push Toyota from its spot as the world's largest automaker, behind General Motors and Volkswagen.

"Toyota's production will most certainly fall from last year's level, while both GM and Volkswagen will make big gains in the U.S., Europe and China," Koji Endo at Advanced Research Japan in Tokyo told Bloomberg.