Toyota profits easily beat forecasts as weaker yen helps sales

Toyota has reported better-than-expected profits for the first quarter of the fiscal year helped by cost cuts and a weakening yen.

The world's second-biggest carmaker said profits rose 10% to ¥646.3bn (£3.3bn, €4.8bn, $5.2bn) from ¥587.7bn a year ago.

This was despite consolidated vehicle sales falling by 127,000 to 2.1 million.

Analysts polled by Thomson Reuters had expected a net income of ¥607.5bn.

The positive results come one week after the company was overtaken by Volkswagen as the world's biggest-selling carmaker.

Sales were helped by a sharp decline in the value of the yen, which makes Japanese products cheaper and more competitive in overseas markets.

In a statement, Toyota managing officer Tetsuya Otake said: "Favourable foreign exchange rates and cost reduction efforts were main positive factors, while decreased vehicle sales and increased expenses to support initiatives for enhancing competitiveness were negative factors."

Car sales in North America increased in the first quarter while it declined in Japan and remained broadly steady in Europe.

Sales in Asia, South America, Oceania and Africa eased sharply.

Toyota slightly downgraded its consolidated sales forecast for the full fiscal year to 8.9 million from 8.95 million units.

Shares in the carmaker closed down 1% in Tokyo ahead of the earnings release.