UPDATED: 8/5/14 8:49 am ET - adds rivals' profits, link
TOKYO -- Toyota Motor Corp. today said net income in the April-to-June period rose to a quarterly record 587.8 billion yen ($5.7 billion) as surging SUV sales in the United States, the company's biggest market, eclipsed shrinking demand in Japan.
For the financial year to March, Toyota raised its North America sales projection to 2.71 million vehicles from 2.62 million.
Toyota is outpacing a growing U.S. auto market headed toward its best year since 2006, buoyed by more confident consumers, recovering payrolls and low interest rates. The company’s U.S. deliveries climbed 11 percent in the April-to-June period, topping the total industry’s 6.9 percent rise. In July, Toyota's total U.S. sales rose 12 percent, surpassing Ford Motor to become the No.2 seller for the month.
"They sell an awful lot of high-end SUVs," Mark Yockey, a New York-based managing director at Artisan Partners, said before the company released results. "There’s a waiting line to buy Highlanders in the U.S., and those sell at much higher margins than if you’re just selling Corollas."
Toyota’s net income also led the industry for the quarter. Its profit was about 30 percent higher than Volkswagen’s 3.19 billion euros ($4.4 billion), and surpassed the combined earnings of General Motors, Ford Motor Co., Nissan Motor Co. and Honda Motor Co.
The full-year sales target for Asia excluding Japan was trimmed to 1.58 million vehicles from 1.63 million, while Europe was nudged up to 860,000 from 850,000. Japan was left unchanged at 2.21 million. The first sales-tax increase in 17 years in Japan in April dented demand for new cars in the company's home market and Toyota's April-June domestic sales dropped 10 percent year-on-year to 319,460 vehicles.
For the current calendar year, the company trimmed its global groupwide sales forecast to 10.22 million vehicles, a reduction of 110,000 vehicles, reflecting weakness in emerging markets. "Conditions in Thailand, India, Brazil and other emerging markets are weak," Managing Officer Koki Konishi told an earnings briefing. "But we're trying our best to get an additional 50,000 vehicles out of Japan to offset some of that, and to reach around 2.3 million in the U.S."
Toyota said its operating profit for the quarter was 692.7 billion yen ($6.76 billion). North America operating profit for the period rose 45 percent to 149.7 billion yen, the company said, adding that cost cuts and a weaker yen also helped to bolster earnings.
Toyota maintained its 1.78 trillion yen profit forecast for the fiscal year ending in March 2015, down from last year’s record 1.82 trillion yen because of forecast slumping domestic sales following Japan’s consumption tax increase.
Toyota's $5.7 billion profit in the April-June period compares with Honda's $1.9 billion, Ford's $1.3 billion, Nissan's $1.1 billion and GM's $190 million.
Through the first half of 2014, Toyota and its Hino Motors and Daihatsu units sold 5.1 million vehicles worldwide. Volkswagen last week reported 5.07 deliveries, including results for its heavy-truck units.
Bloomberg and Reuters contributed to this report