Toyota’s First-Quarter Profit Nearly Doubled

Toyota Motor, the world’s largest automaker by sales, lifted its annual profit forecast on Friday after almost doubling its net income in the quarter that ended in June to 562.1 billion yen ($5.64 billion) from a year earlier, thanks to favorable exchange rates.

Profit in the Japanese automaker’s financial first quarter beat analysts’ expectations by a wide margin, and underscored the boost that Toyota and other automakers have received from the economic policies of Prime Minister Shinzo Abe of Japan. Those policies have galvanized Japan’s export industry by weakening the yen by about 15 percent since last year, increasing the value of products sold overseas.

Technically, Toyota sold almost 37,000 fewer vehicles in the latest quarter, compared with the same quarter

last year, with sales falling in Europe, Asia and Japan. Sales in Japan have slowed since government incentives for fuel-efficient cars expired last year. Toyota is also struggling in China, the world’s biggest auto market, because consumer enmity over a territorial spat between Beijing and Tokyo has weighed on sales of Japanese brands. Auto sales continue to slump across the board in Europe.

But it was the weaker yen, together with a strong showing in its biggest overseas market, the United States, that lifted Toyota’s bottom line. Economists predict the yen to weaken further, while the latest United States sales figures, for July, showed Toyota surging ahead of Ford for the first time in three years, with a 17 percent jump from the same month last year.

Toyota now expects net income for its full financial year that ends next March to reach 1.48 trillion yen, up slightly from a previous forecast of 1.37 trillion yen and an increase of 54 percent from its net profit last year.

In the latest quarter, net profit rose 93.6 percent from a year earlier to 562.1 billion yen, while operating profit rose 87.9 percent to 663.3 billion yen. Toyota attributed more than four-fifths of its operating profit increase to the weaker yen. Net revenue for the quarter rose 13.7 percent to 6.255 trillion yen compared to last year.

Helped by its strong numbers, Toyota is set to become the first automaker in the world to build more than 10 million vehicles in a single year. It said on Friday that it would build 10.12 million vehicles this calendar year, up 180,000 units from a previous production plan. Those numbers include models made by Daihatsu Motor and Hino Motors, which are part of the Toyota group.