Toyota Motor Corp, the world’s largest carmaker, raised its full-year profit forecast as sales in emerging markets exceeded the company’s estimates.
Net income may total ￥490 billion (US$5.95 billion) for the 12 months ending on March 31, compared with an earlier estimate of ￥350 billion, the Toyota City-based company said in a statement yesterday.
That was higher than the ￥470 billion average estimate of 11 analysts compiled by Bloomberg.
Toyota follows Honda Motor Co in boosting its earnings outlook as economic growth in Asia spurs sales, helping the automaker recover from the impact of record recalls.
Toyota’s sales in the region, excluding Japan, rose 24 percent in December. The company introduced the Etios compact in India in December and has received more than 22,000 orders for the model.
“Demand in Asia will continue to grow,” said Satoru Takada, a Tokyo-based analyst at TIW Inc. “The automaker was also able to control its costs.”
For the fiscal third quarter, net income fell 39 percent to ￥93.6 billion.
“In addition to an improving -vehicle-sales outlook in Japan, Asia and Russia, the progress of our company-wide profit improvement activities, such as further reduction of variable costs and control over fixed costs, has exceeded our earlier expectations,” senior managing director -Takahiko Ijichi said in a statement.
Toyota shares were unchanged at ￥3,490 in Tokyo trading before the earnings announcement.
The company revised its outlook for the yen’s exchange rate against the dollar to ￥86 from ￥85. A stronger yen erodes profit gains by reducing the repatriated value of overseas sales.
A stronger yen also weighs on profit. The yen traded at ￥82.30 to the dollar as of 3:15pm yesterday after reaching a 15-year high of ￥80.22 against the dollar on Nov. 1.
Every ￥1 the currency appreciates against the dollar erodes about ￥30 billion from the company’s earnings, -according to Toyota.
Toyota has continued to issue recalls for various defects as it seeks to regain customer trust.
The company said on Jan. 26 it would repair 1.7 million vehicles globally because of faults in fuel pipes and pumps, pressure sensors and spare-tire carriers.
The announcement came after the carmaker recalled more than 8 million vehicles for problems linked to unintended acceleration.
Honda, Japan’s third-largest automaker, increased its full-year net income forecast last week by 6 percent to ￥530 billion. Nissan Motor Co is scheduled to report earnings today.