The Japanese automaker, in a race with General Motors to be the world's largest car company, reported lower-than-expected earnings for its fiscal fourth quarter as a strong yen and weak U.S. sales took their toll.

Worse, the company said it expected profits to fall 27 percent this year and forecast a 5 percent drop in annual sales, which would be its first in nine years.

Like its American counterparts, Toyota reported strong results in non-U.S. markets. But North America accounts for about half of Toyota's operating profit and a third of its sales.