(Bloomberg) -- Toyota Motor Corp.’s profit climbed in the latest quarter after a weak yen and robust demand in North America boosted sales.
Operating profit was ¥1.31 trillion ($8.7 billion) for the April-June period, up 17% from a year earlier, the world’s biggest carmaker said Thursday. That was mostly in line with the ¥1.32 trillion projected, on average, by analysts. The operating profit forecast for the fiscal year was kept the same, at ¥4.3 trillion.
Hybrids are selling well in North America, making up for sluggish demand for Toyota’s vehicles in Japan and China. At the same time, a weaker yen is helping to boost income in the carmaker’s home currency. Despite ongoing turmoil from a government probe that found seven of its cars weren’t properly certified for mass production, analysts are still projecting the carmaker to post a record profit this year, of ¥5.3 trillion.
This week, Toyota was dealt its first ever corrective order by Japan’s transport ministry, after a government investigation found that seen of its car models weren’t properly tested for mass production. The order is the latest development in a series of fraudulent behaviors that began with a pair of Toyota subsidiaries half a year ago, then last month at the carmaker itself.
“Though the damage to sales could be recovered in the short term, the long-run reputational hit may be a bigger concern,” according to Bloomberg Intelligence.
Revenue for the latest quarter rose 12% to ¥11.8 trillion. For the fiscal year, Toyota kept its revenue outlook the same, at ¥46 trillion.
Although profits are seen on track, there are signs of underlying weakness. The carmaker’s global sales fell 4.7% to 5.2 million in the first six months of 2024, most prominently in Japan and China. That was due in large part to broad recalls of the Prius and other models, as well as intense competition from EV makers such as China’s BYD Co.
