TOKYO -- Toyota Motor Corp. reported a fivefold increase in net income for the October-December quarter as huge foreign exchange windfalls powered profits higher.
Net income increased to 525.4 billion yen ($4.99 billion) in the company's fiscal third quarter ended Dec. 31 from 99.9 billion yen ($949.4 million) a year earlier.
Global revenue grew 24 percent to 6.585 trillion yen ($62.58 billion) in the three months, as vehicle sales increased 10 percent to 2.317 million units, the company said today.
The yen's tumbling value against foreign currencies, including the U.S. dollar, ramped up earnings in the period. A weaker yen increases the yen value of overseas earnings when repatriated to Japan and makes Japanese exports more competitive internationally.
Toyota booked a foreign exchange gain of 260.0 billion yen ($2.47 billion) in the period. The yen lost about 23 percent of its value against the dollar over the past year, Toyota said.
Big sales gains in North America and Japan also buttressed Toyota's global expansion.
Toyota kept its title as the world's biggest automaker in 2013 by selling a record 9.98 million vehicles and has already surpassed pre-financial crisis sales levels. Analysts estimate Toyota earned about as much profit in 2013 as General Motors Co. and Volkswagen Group combined.
Higher earnings outlook
In announcing fiscal third-quarter results today, the company lifted its earnings outlook to target record profits too. The higher goal underscores Toyota's full comeback from a string of tough years marred by the company's first operating loss in seven decades, a worldwide unintentional acceleration recall crisis and the 2011 killer earthquake-tsunami in Japan.
In the current fiscal year ending March 31, Toyota now targets record net income of 1.9 trillion yen ($18.06 billion), from a previous outlook of 1.67 trillion yen ($15.87 billion). That compares with Toyota's record full-year net income of 1.718 trillion yen ($16.33 billion) in the fiscal year ended March 31, 2008, right before the economic crisis hit.
That year, the company booked record operating profit of 2.270 trillion yen ($21.57 billion) and all-time high revenue of 26.289 trillion yen ($249.85 billion).
Toyota predicts record operating profit of 2.4 trillion yen ($22.81 billion) in the current fiscal year, but the revenue forecast of 25.5 trillion ($242.35 billion) would be its second highest.
In the third quarter, Toyota's unit sales climbed 10 percent to 664,000 vehicles in North America, the carmaker's biggest market. The carmaker posted even more impressive gains at home in Japan, where sales advanced 13 percent to 540,000 vehicles.
Domestic sales rose partly on the back of Japan's improving economy and partly because of a rush to make big purchases before an April increase in the country's consumption tax.
U.S. sales of Toyota, Lexus and Scion models rose 7.4 percent to 2.24 million in 2013, second only to the record set in 2007 in its largest market. The Camry sedan fended off competition from the Honda Accord, Nissan Altima and Ford Fusion sedan to remain the top-selling U.S. car for a 12th consecutive year.
This year, Toyota's U.S. sales will probably increase by 100,000 units, helped by new or updated models including the Corolla, RAV4 and Tundra, Jim Lentz, head of Toyota's U.S. operations, said Jan. 12.
In North America, Toyota reaped 112.5 billion yen in operating profit last quarter, versus a loss a year earlier.
China record sales
In China, Toyota had a record year in 2013, boosting deliveries 9.2 percent to 917,500 units after it recovered from the consumer backlash triggered a year earlier by a territorial dispute between Asia's two largest economies.
Toyota is expecting sales to exceed 1.1 million units in the country this year, counting on the new Vios and Yaris sedans that are tailored for Chinese consumers to drive demand.
Operating profit in Europe rose to 17.7 billion yen, from 9.25 billion yen a year earlier, amid mounting signs that the region is recovering economically.
Toyota sold about 824,000 units of vehicles in Europe in 2013, up 8 percent from a year earlier. Shipments to Europe have become more profitable after the yen fell 26 percent against the euro last year.
"At this exchange rate, Europe constitutes the most lucrative of the main Japanese export markets," Masataka Kunugimoto, an auto analyst at Nomura Holdings, wrote in a report Jan. 7. Kunugimoto expects the European auto market to edge up 0.2 percent in 2014 after having fallen for six straight years.
Bloomberg contributed to this report
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