Toyota reports record quarterly profit, sales, thanks to strong sales in U.S., Europe

Toyota reported record sales and net profit for the October-December quarter Tuesday as the Japanese company moves closer to surpassing General Motors as the world's biggest automaker.

Photo: Toyota reports record quarterly profit, sales, thanks to strong sales in U.S., Europe

Hot sales of the Camry sedan and the remodeled RAV 4 sport utility vehicle in North America helped Toyota Motor Corp.'s group net profit to rise 7.3 percent to 426.8 billion yen (US$3.6 billion; EUR 2.8 billion) in the fiscal third quarter, up from 397.6 billion yen the same period the previous year.

Quarterly sales climbed a solid 15.2 percent to 6.15 trillion yen (US$51.2 billion; EUR 39.6 billion).

"Toyota's numbers are super, super strong," said Koji Endo, auto analyst with Credit Suisse First Boston Securities in Tokyo. "To be honest, it's hard to find anything bad at this point."

Toyota did not comment on where it might build its next U.S. factory to keep up with strong demand there. American newspapers have reported that Chattanooga, Tennessee, and Marion, Arkansas, are among the finalists.

The United States is a critical and lucrative market for Toyota, which last year surpassed DaimlerChrysler AG to become No. 3 in the U.S. in terms of vehicles sold behind GM and Ford Motor Co.

Elsewhere, demand was strong in Europe for the Yaris compact. In South America, sales were healthy for pickups and minivans produced under the company's IMV, or International Multipurpose Vehicle, system that allows it to build several models on a standardized platform.

Toyota, with its reputation for reliable, fuel-efficient cars, has gotten a big boost lately from the rise in oil prices. It also is a leader in producing hybrids, which use electricity and gasoline.

Net profit and sales reached a record for any quarter, said Senior Managing Director Takeshi Suzuki. "We believe our company wide efforts have contributed to these results," he said in a release.

Toyota has long beaten struggling General Motors Corp. in profitability, but it still trails GM in annual global vehicle production.

Last month, Toyota said global vehicle production topped 9 million in 2006, at 9.018 million vehicles, marking the fifth year straight of growth. GM its group automakers produced 9.18 million vehicles worldwide in 2006 about 162,000 vehicles more than its Japanese rival.

In contrast to Toyota, Detroit-based General Motors lost US$3 billion during the first nine months of last year. It's delayed its earnings release due to accounting errors but is promising to turn a profit in the fourth quarter of 2006, its first in nearly two years. And Ford recently reported a $12.7 billion net loss for 2006, and has said it expects to lose money in 2007 and 2008, returning to profitability in 2009.

Toyota said its quarterly earnings got a 30 billion yen (US$250 million; Ђ193 million) boost from the yen's weakness against the dollar, which boosts the value of overseas income when repatriated. Other cost reductions efforts added another 20 billion yen (US$167 million; EUR 129 million).

It maintained its forecasts for the fiscal year through March, projecting net income of 1.55 trillion yen (US$12.9 billion; EUR 10. billion) on sales of 23.2 trillion yen (US$193 billion; EUR 149 billion).

Toyota also kept its vehicle sales forecast for the fiscal year ending March 31 unchanged at 8.47 million vehicles. During the fiscal third quarter, it sold 2.16 million vehicles, up 8.9 percent from a year ago.

Also Tuesday, Mitsubishi Motors Corp., Japan's No. 4 automaker, reported its first quarterly profit since 2004.

Mitsubishi Motors, which has been fighting to regain consumer trust devastated by a recall scandal several years ago, had a net income of 4.3 billion yen (US$35.8 million; EUR 27.7 million) for the fiscal third quarter. A year ago, it lost 4.3 billion yen.

Honda Motor Co., the nation's second-biggest automaker, reported healthy third quarter results last week. Profit at Honda, which makes Accord and Civic cars and Odyssey minivans, climbed 8.8 percent to 144.8 billion yen (US$1.2 billion; EUR 930 million), while sales rose 12 percent, reports AP.

Nissan Motor Co. fared less well, reporting that quarterly earnings fell 22 percent. Nissan also slashed its profit forecast for the fiscal year by 12 percent to 460 billion (US$3.8 billion; EUR 2.9 billion). That would be its first annual profit decline in seven years.

Toyota shares, which have climbed a third in value over the past year, closed up 1.8 percent in Tokyo at 7,960 yen (US$66; Ђ51).