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Updated from 3:30 a.m. EDT


(TM) - Get Toyota Motor Corp. Report

, the world's largest automaker, reported a fiscal-year loss of 437 billion yen ($4.4 billion), wider than its internal forecasts, and said it expects an operating loss of 850 billion yen in fiscal 2010.

Sales for the year ended March 31 fell 21.9% to 20.53 trillion yen. The operating loss was 461 billion yen.

The prior year Toyota reported earnings of 1.72 trillion yen on sales of 26.29 trillion yen.

In February, the automaker said it expected to report a fiscal 2009 net loss of 350 billion yen as global demand for its cars plunged and a strengthening yen hurt its results.

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"Both revenues and profits declined severely during this period. The negative impact was a consequence of the significant deterioration in vehicle sales particularly in the U.S. and Europe, the rapid appreciation of the yen against the U.S. dollar and the euro and the sharp rise in raw materials," said President Katsuaki Watanabe in a statement Friday.

The loss in the January-March quarter was 765.8 billion yen ($7.74 billion).

Toyota projects a net loss in fiscal 2010 of 550 billion yen, and expects sales to fall 19.6% to 16.5 trillion yen.

The company also said it plans to cut its dividend.

Standard and Poor's on Friday lowered its long-term credit rating on Toyota one notch to "AA" -- the third-highest rating -- and gave a "negative" outlook. But S&P also said the automaker "maintains a minimal financial risk profile, characterized by a strong capital structure with massive liquidity."

Toyota was likely to face hard times for a while because demand will likely remain depressed into 2010 before it could hope to again count on its strengths to boost profits once a recovery arrives, S&P said in a statement.

Toyota's vehicle sales for the fiscal year ended March 31 fell 15.1% to 7.57 million vehicles from 8.91 million vehicles the previous year. It expects to sell even fewer vehicles -- 6.5 million -- in the fiscal year through March 2010.

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