Toyota sees profits rise again

Japan’s Toyota has reversed an earlier forecast of lower annual profits.

It said it now expected profits for the full year to be 1.95 trillion yen ($17bn), after a previous forecast of 1.83tn yen of annual net income.

The revised forecast is partly due to the weaker yen. Toyota is now assuming an exchange rate of 111 yen to the dollar, instead of 105 yen previously.

The car giant’s revision came with the release of six-month figures that showed profits up 13.2% at 1.07tn yen.

Profits from Toyota’s overseas sales fluctuate with the level of the yen against major market currencies.

If the yen falls, foreign earnings buy more of the currency when brought back into Japan, giving a boost to reported profit numbers.

Consolidated vehicle sales for the six months to September were 4,389,435, up by 25,898 units compared with the previous year.

Sales in Japan were 1,087,354 units, up by 8,544. The key North America market saw a fall in sales of 4,211 to 1,396,158 units, while in Europe, vehicle sales were 469,503 units, a rise of 35,122 units.

The company’s previous yearly figures marked the first fall in profits in five years, which it blamed on the cost of customer incentives in its key US market.

Toyota also said on Tuesday it would buy back another tranche of its shares, this time worth 250bn yen.

Such a move typically will typically boost a company’s share price, as it leaves fewer shares among which to share around the profits.