TOKYO (AP) – Toyota Motor Corp, the world’s No 1 automaker, raised its earnings forecast Wednesday after third quarter profit jumped 14 per cent, boosted by a weak yen.
Toyota reported a better-than-expected 600 billion yen ($5.1 billion) profit for the three months through December. Quarterly sales of 7.17 trillion yen ($61 billion) were up 9 per cent year-on-year.
Analysts surveyed by FactSet had forecast a quarterly profit of 540 billion yen ($4.6 billion).
The Japanese automaker, which makes the Camry sedan, Prius hybrid and Lexus luxury model, expects a profit of 2.13 trillion yen ($18 billion) for the fiscal year through March, up nearly 17 per cent from the previous year. It had previously projected a 2 trillion yen ($17 billion) profit.
Toyota has held the top spot in global vehicle sales for three years straight, selling 10.23 million vehicles last year, beating Volkswagen AG of Germany and US rival General Motors Co.
Toyota’s bottom line has gotten a lift from the cheap yen, although Managing Officer Taku Sasaki also credited cost cuts.
The dollar averaged about 114 yen for the fiscal third quarter, while it cost 100 yen the same period the previous year. It has risen to about 118 yen recently.
Toyota said it added 145 billion yen ($1.2 billion) to its quarterly operating profit from the foreign exchange rate, while gaining 80 billion yen ($680 million) from cost cuts.
The latest results show Toyota in robust financial health as it embarks on renewed growth, after putting such ambitions on hold during serious setbacks suffered over a massive recall scandal, fines from U.S. authorities and many lawsuits, especially in the US since 2009.
In Minneapolis on Tuesday, a US federal jury decided the design of the 1996 Toyota Camry had a dangerous defect that was partly to blame for a fatal 2006 crash, and ordered Toyota to pay nearly $11 million to victims.
But Toyota’s global brand has largely recovered the recall crisis and US sales have been doing well. Cash-rich Toyota is also likely able to afford the lawsuits.
Toyota President Akio Toyoda has compared the company’s situation to a landing between two flights of stairs, while cautioning that the next climb would remain cautious but sustainable.
Challenges are great, with Volkswagen and others right on Toyota’s heels in huge overseas markets such as China.
Toyota is also trying to lead a move toward what it calls a “hydrogen society,” centred on fuel cell vehicles, which run on the power produced when hydrogen combines with oxygen in the air to produce water.
Hydrogen can also provide heat and electricity for homes, if not, entire towns. Other automakers are also working on fuel cells.