Toyota raises forecast despite 24% slide in quarterly profit

TOKYO -- Toyota Motor Corp. more than doubled its full-year operating profit forecast on Friday, as vehicle sales rebound in China from a coronavirus pandemic squeeze earlier this year that contributed to a 24 percent slide in quarterly earnings.

Japan's top automaker said it now expects an operating profit of 1.3 trillion yen ($12.6 billion) for the fiscal year through March 2021, up from the 500 billion it predicted previously. Operating profit for the previous financial year was 2.47 trillion yen ($23.9 billion).

For the July-September quarter, operating profit fell to 506 billion yen ($4.9 billion) from 662.4 billion in the same period a year earlier, according to Reuters' calculations, as sales dipped amid the coronavirus impact globally.

Still, the numbers already showed progress compared with the April-June period, CFO Kenta Kon said.

"If you compare the second quarter to the first you can see a dramatic recovery," Kon said, speaking during an online press briefing.

"Investors are looking at how Toyota is faring overseas and given the yen's appreciation (versus the dollar) and a resurgence of the coronavirus, we have to consider the (profit forecast) revision cautiously," said Kazuo Kamiya, a fund manager at Nomura Securities. A strong yen reduces the value of sales booked in the United States.

The maker of the RAV4 crossover and the Prius gasoline-electric hybrid now expects to sell 9.42 million vehicles this year -- up 3.5 percent from a previous forecasts of 9.1 million this year, but still well below last year's sales of 10.46 million.

Although still weaker than last year, demand has bounced back, particularly in China, the world's biggest auto market. Toyota and rivals are pinning recovery hopes on winning business there as China recovers from the pandemic faster than other countries.

Overall vehicle sales in China in September increased 12.8 percent, a sixth straight monthly gain, although sales were still 6.9 percent lower than the same time a year earlier.

Toyota has seen demand in China increase for its electric cars and Lexus luxury brand.

A senior Toyota executive in China said in September that annual global sales of electrified vehicles could reach 5.5 million in 2025, five years earlier than initially planned.