Toyota posts big profit helped by North American sales rebound
Toyota Motor Corp. profits soared in the latest quarter, helped by strong sales in North America and a slide in the value of the Japanese yen.
Toyota, which surpassed GM in 2012 to become the world’s largest auto company, said profit for its third fiscal quarter, or the three months ended in Dec. 31, rose 23% to $1.09 billion (99.91 billion yen), compared to the same period a year earlier. Sales for the quarter rose 9% to $58 billion (5.3 trillion yen).
“Given increased overseas vehicle sales mostly in North America, progress in our company-wide profit improvement activities and the slight weakening of the yen,” Toyota now expects a full-year fiscal year profit of $9.3 billion (860 billion yen), said Takahiko Ijichi, the automaker’s senior managing director. That’s up about $800 million, or 80 million yen, from its prior estimate.
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Toyota’s profit picture is being helped by strong U.S. sales and a slide in the value of the Japanese yen, which makes foreign transactions more profitable.
In North America, Toyota sold 1.865 million vehicles, a 47% increase over the same period last fiscal year. It posted an operating profit of 165.4 billion yen, or more than $2 billion in the region.
Toyota even squeezed out a profit in recessionary Europe, where most of its rivals are suffering large losses.
The company’s North American operations are recovering from a series of large recalls and the payment of record federal fines for delaying recalls as well as production disruptions and inventory shortages caused by the 2011 Japanese earthquake and tsunami.
Toyota’s U.S. sales rose 26.6% last year to almost 2.1 million vehicles. Its share of the U.S. auto market climbed to 14.4% in 2012 from 12.9% in the prior year.
“Toyota experienced the year of the dream comeback in 2012,”said Jesse Toprak, senior analyst at TrueCar.com. “Virtually all of the metrics by which we define an automaker’s performance improved dramatically for the company after a couple years of a roller coaster ride.”
The company made money in the U.S. even though in late December it agreed to pay more than $1 billion to settle dozens of lawsuits relating to reported incidents of sudden acceleration.
The settlement, among the largest ever paid by an automaker, ended numerous suits claiming economic damages caused by safety defects in the automaker’s vehicles, but did not cover dozens of personal injury and wrongful-death suits that are still pending around the nation.
The suits were filed over the last three years by Toyota and Lexus owners who claimed that the value of their vehicles had been hurt by the potential for defects, including floor mats that could cause the vehicles to surge out of control.
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