Toyota Reports $2.2 Billion Quarterly Profit

(AP) Toyota reported a quarterly profit of $2.2 billion, reversing from red ink a year earlier as global car sales recovered and raised its full year earnings forecast.

The world's biggest automaker said Wednesday that revenue for the April-to-June quarter surged 27 percent to 4.87 trillion yen ($57.3 billion) as car sales jumped in North America, Japan and other parts of Asia including Thailand and Indonesia.

Its profit of 190.47 billion yen ($2.2 billion) was achieved despite worries that Toyota's massive recalls of popular models would hurt sales. The result was a sharp improvement from a loss of 77.8 billion yen the year before when the global recession crushed car sales.

Auto sales at General Motors Co. and Ford Motor Co. were flat to slightly higher in July, a sign that Americans were still willing to spend on big-ticket items. But the gains could be short-lived because shoppers remain anxious about slow economic growth and hiring.

Toyota Motor Corp. raised its profit forecast for the year through March 2011 to 340 billion yen ($4 billion) from 310 billion yen ($3.6 billion), underlining the staying power of the automaker amid lingering worries about quality control.

Toyota, which makes the Camry sedan and Lexus luxury model, had long been lauded for creating a manufacturing system that ensured a consistently high standard of quality.

But the automaker has recalled about 10 million vehicles globally since October for various problems including faulty floor mats, sticky gas pedals, braking software glitches and steering malfunctions.

Its reputation has also taken a hit from more than 300 lawsuits it faces in the U.S. claiming damages for deaths and injuries suspected of being linked to acceleration problems and from owners claiming the value of their cars has diminished because of alleged defects.

Toyota said cost reductions of 50 billion yen ($588 million) also helped its latest results, offsetting the damage from a stronger yen, estimated at 30 billion yen ($353 million).

Senior Managing Director Takahiko Ijichi acknowledged it was difficult to assess what effect the recalls had on Toyota's latest earnings.

He said Japanese government-backed incentives for green vehicles are set to end in September, and that could hurt sales in Japan. Toyota's own incentives are believed to be behind its recovering sales in North America.

"We will try to regain trust from our customers as quickly as possible and we will continue our effort to improve sales," said Ijichi.

© MMX, The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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