Toyota faces fifth straight profit decline: earthquake disruption, China weakness and the auto stocks to watch

Toyota is approaching earnings under pressure from weaker demand, higher material costs and production stoppages following an earthquake in Japan.

Analysts expect April-to-June operating profit to fall about 5% year over year to roughly 1.11 trillion yen. Toyota and Lexus global sales declined 3% to just over 2.5 million vehicles, including a 28% drop in China.

Toyota has also suspended production at four Japanese plants while suppliers assess earthquake damage. Investors must decide whether these are temporary setbacks or signs of a broader decline in competitiveness.

Winners

U.S. crossover and SUV manufacturers

Names: $GM (General Motors), $F (Ford Motor)

Toyota is moving from the outgoi ...