Toyota has beaten market estimates with its best quarterly operating profit in two years. It also lifted its cautious forecasts despite a sluggish US recovery and a stronger yen.
For the April-June quarter, Toyota reported an operating profit of 211.7 billion yen thanks to a sharp rise in vehicle sales, swinging from a loss of 194.9 billion yen a year ago.
Toyota is still suffering from the impact of its safety recalls, with profit margins also under pressure because of higher sales incentives to attract US customers. Toyota's first quarter margin was 4.3%, compared with Nissan's 8.2% and Honda's 9.9%.
First-quarter net profit, which includes earnings made in China, was 190.5 billion yen, compared with a loss of 77.8 billion yen a year earlier.
After the financial crisis hammered car demand globally, the world's largest car maker has been plagued with excess production capacity, putting pressure on margins.
The crisis that forced Toyota to recall more than 10 million vehicles for problems with unintended acceleration and braking issues compounded those woes, costing the company billions of dollars and tarnishing its image.
President Akio Toyoda has vowed to put the recall debacle behind him, calling 2010 a fresh 'starting line' for the 73-year-old company founded by his grandfather.
Toyota expects to export around 60% of its Japan-made vehicles this year - a higher ratio than at rivals Honda and Nissan.
While higher than its earlier forecast, Toyota's new guidance for operating profit to total 330 billion yen ($3.85 billion) in the year to March 31 2011 is still far short of what analysts had expected.
