Toyota Posts Record Profit

TOKYO—Toyota Motor Corp. posted a record quarterly net profit of ¥ 646.4 billion ($5.21 billion) on Tuesday, as Japan's biggest auto maker continued to bank on a weaker yen.

That was above the mean estimate of ¥ 607.5 billion, according to analysts polled by Thomson Reuters. The company's quarterly revenue was ¥ 6.99 trillion, up 9.4% from last year.

While Toyota was surpassed by Volkswagen AG for the top spot in world-wide vehicle sales in the first half of the year, the size of its profits continues to overwhelm its biggest rivals.

That is partly because of a weaker yen, which makes Toyota's exports more profitable. In April-June 2014, Toyota's average exchange rate was ¥ 102 against the dollar, while the dollar is currently trading at around ¥ 124.

The pace of Toyota's U.S. sales growth, however, is slower than its rivals. In April-June, Toyota's U.S. sales grew 1.7%, lower than the industrywide growth rate of 3.3%. Sales of sport-utility vehicles and pickups are growing, but passenger-car sales, which account for more than half of Toyota's U.S. sales, fell nearly 8%. In July, Toyota's U.S. sales rose just 0.6% from a strong performance a year earlier.

Meanwhile, in China, the world's biggest auto market, Toyota has been posting strong sales in recent months. In April-June, sales grew 20% year-over-year, while in July, they rose 23.7%, backed by strong sales of the Corolla and Levin sedans.

The recent slowdown in the Chinese auto market isn't fully reflected in Toyota's first-quarter results because, like rival Nissan Motor Co., there is a lag of one quarter in incorporating China-related figures in the company's earnings.

Write to Yoko Kubota at [e-mail]

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