Toyota reports 11 percent jump in profit

By YURI KAGEYAMA, AP Business Writer
Wed Nov 7, 6:16 AM ET

Japan’s top automaker Toyota said Wednesday its July-September quarter profit rose 11 percent on solid overseas sales and raised its earnings forecast for the full year.

Soaring gasoline prices have boosted the appeal of Toyota’s hybrid Prius and fuel-efficient models, such as the Camry and Corolla. Although sales were stagnant in Japan, Toyota sales were strong in North America, Europe, Asia and emerging markets.

Toyota Motor Corp.’s net profit for the fiscal second quarter rose to 450.9 billion yen ($4 billion) from 405.7 billion yen the same period the previous year. Sales increased 11 percent to 6.490 trillion yen ($57 billion), the company said in a statement.

The automaker posted record sales and profit for the fiscal first-half, and its immediate future looks promising too.

The company has raised its forecasts for profit, revenue and vehicle sales for the full financial year. Toyota, which has already beaten General Motors Corp. in profitability, is believed to be on track to surpass GM in annual vehicle sales soon.

“We posted record results in both revenues and profits” for the first-half, Toyota Executive Vice President Mitsuo Kinoshita said in a statement. “We believe our efforts to build a globally balanced operational foundation contributed to these results.”

Toyota lifted its forecast for vehicles sold this fiscal year to 8.93 million from the 8.89 million it projected in May.

For the full-year through March 2008, Toyota projects net income of 1.7 trillion yen ($14.9 billion), better than an earlier projection of 1.65 trillion yen, and sales of 25.5 trillion yen ($223.9 billion), up from 25 trillion yen.

Weakness in the yen, which makes overseas vehicles more competitive and boosts foreign income when converted back to yen, also benefited the company, adding 150 billion yen ($1.32 billion) during the six-month period.

Cost cutting boosted profit by another 50 billion yen ($439 million).

“Toyota’s first-half results are excellent,” said Lehman Brothers auto analyst Tsuyoshi Mochimaru. “First, it has succeeded in reducing costs at a time when material costs are rising. Second, its global sales are growing.”

Toyota sold 1.497 million vehicles in North America during the first six months of fiscal 2007, up 2.3 percent from 1.464 million a year earlier on robust demand for the Tundra pickup and the Prius.

In Europe, strong sales of the Corolla, Lexus luxury models and the Camry helped boost vehicle sales to 635,000 vehicles, up nearly 8 percent from 589,000 a year ago.

Sales in Asia burgeoned 18 percent from the previous year to 452,000 vehicles, with Indonesia and China posting particularly healthy numbers.

For the fiscal half-year, net profit rose 21.3 percent to 942.4 billion yen ($8.27 billion) while sales increased 13.4 percent on year to 13.012 trillion yen ($114.24 billion). During the six months, Toyota sold a record high 4.3 million vehicles worldwide, up 3.8 percent from the same period a year earlier.