Strong sales outside Japan drive up Toyota’s earnings

Booming overseas sales and a favorable currency rate helped send Toyota’s fiscal first-half profit to a record, the company reported Wednesday, and the world’s No. 2 automaker raised its forecast for the full fiscal year.

The news from Toyota Motor Corp. struck a sharp contrast with rival General Motors Corp.’s report later in the day that it lost a company record $39 billion for the July-September quarter because of a charge involving unused tax credits.

Toyota appears to be on track to surpass GM as the world’s top automaker for a full year as soon as this year.

The Japanese automaker has been flourishing as soaring gasoline prices boost the appeal of its gas-electric hybrid Prius and popular smaller models, such as the Camry and Corolla. Although sales were stagnant in its home market, Toyota sales were strong in North America, Europe, Asia and emerging overseas markets.

“First, it has succeeded in reducing costs at a time when material costs are rising. Second, its global sales are growing,” said Tsuyoshi Mochimaru, auto analyst at Lehman Bros. in Tokyo.

Toyota’s net income for the July-September period rose to 450.9 billion yen ($4 billion), up 11% from 405.7 billion yen a year earlier. Quarterly sales rose 11% to 6.49 trillion yen ($57 billion).

Worries about consumer spending in the U.S. amid a credit crunch didn’t seem to hurt the company’s momentum. Toyota has built a brand image as an ecological innovator by beating rivals to the commercial mass market with hybrids a decade ago.

As other automakers rush to develop hybrids, Toyota has promised other experimental models such as plug-in hybrids and advanced batteries.

For the fiscal first half, Toyota sold a record 4.3 million vehicles worldwide, up 3.8% from the same period a year earlier.

It earned 942.4 billion yen ($8.27 billion) for the April-September period, up 21.3%, as sales surged 13.4% to 13.01 trillion yen ($114.24 billion).

Toyota raised its forecast to a profit of 1.7 trillion yen ($14.9 billion) for the full fiscal year ending in March 2008. Earlier, it had projected a profit of 1.65 trillion yen ($14.5 billion).

The automaker also raised its sales expectations to 25.5 trillion yen ($223.9 billion) from an initial estimate of 25 trillion yen.

Toyota said it now expected to sell 8.93 million vehicles during the fiscal year, up from a forecast in May of 8.89 million vehicles.