Toyota Motor Corp reported on Wednesday better-than-expected quarterly results and lifted its full-year net profit forecast as the Japanese company continued to benefit from the weaker yen.
The car giant based in Toyota City announced it now expects net income for the twelve months ending March to land at record ¥2.13 trillion, a 16.8% increase compared to Toyotas previous guidance.
However, the company reduced its vehicle sales forecast from 9.05 million vehicles to 9.0 million for the period, with many analysts projecting Germanys Volkswagen to surpass the Japanese company in sales and take the number one spot as the worlds largest car seller.
Toyota projected to sell 2.75 million vehicles in North America, slightly up compared to its previous projections. However, it cut its outlook for car sales in Europe and Asia.
The Japanese company also projected less sales in its domestic market, down to 2.15 million units. Toyota has been suffering in Japan, party due to the sales tax increase launched in April. Toyota sold 7% less vehicles in the nine months to December.
The company is also under pressure from labor unions which insist for higher wages and investments in Japans struggling economy.
The company managed to boost its profit guidance, while expecting less sales due to its highly export-oriented strategy. Toyota manufactures at least a third of its overall production in Japan and sells more than half of those vehicles overseas.
Toyotas domestic currency has fallen against the dollar more than 15% during 2014, which has benefited the company as the US is its largest market. The new projections were made with an assumed average exchange rate of ¥109 to the dollar, previously the company was basing its guidance on a rate of ¥104 for a dollar.
The company said its “profit improvement activities”, including cost cuts, also helped for the lifted forecast.
For the third quarter Toyota reported net income of ¥600 billion, up compared to the ¥525.5 billion the company stated for the three months ended December 2013. On average, analysts polled by Bloomberg were expecting a result of ¥549.2 billion. Revenue for the quarter increased ¥7.17 trillion versus ¥6.89 trillion a year ago.
Fuji Heavy Industries, in which Toyota holds around 16.5% stake, also lifted its full-year guidance by 5% to record ¥253 billion on the weaker yen. However, the Subaru-maker reported a 5.4% decline in net profit in the latest quarter.
Toyota gained 2.36% on Wednesday and closed at ¥7 728 in Tokyo, marking a one-year increase of 40.51%. The company is valued at ¥25.81 trillion.
According to the Financial Times, the 25 analysts offering 12-month price targets for Toyota have a median target of ¥8 800, with a high estimate of ¥10 000 and a low estimate of ¥7 800.
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