Automaker Toyota Motor Corp. (NYSE: TM) reported a 39 percent fall in its third quarter profit, hurt by slower domestic sales and a strong yen.
However, the company boosted its full-year forecast, citing improving sales outlook in emerging markets, sending its shares up in the morning trade on the NYSE.
ADRs of Toyota were up $3.57, or 4.19 percent, at $88.70 on the NYSE.
For the three months ended Dec.31, Toyota earned 93.63 billion yen, or 29.86 yen a share, lower than 153.22 billion yen, or 48.86 yen a share, in the same quarter last year.
Total net revenues fell 12 percent to 4.67 trillion yen, as the Japanese government stopped providing subsidies for environment-friendly cars.
Like its peers Toyota, which has been hurt by a string of global recalls totaling nearly 16 million units, has also been weighed down by a stronger yen, making its products costlier overseas, thereby eroding margins.
In January, Toyota recalled nearly 1.7 million cars, including its top-selling Lexus IS and GS sedans in the U.S., for problems related to its fuel pressure sensor, and problems with fuel lines that are prone to cracking, both of which could cause fuel to leak in the engine compartment and for the cars to, well, explode.
However, Toyota raised its full-year forecast on strong demand from emerging markets.
For the full fiscal year ending March 31, 2011, Toyota boosted its global sales outlook to 7.48 million units from 7.41 million units.
The automaker also increased its full-year net revenues and earnings forecasts. The company now expects net revenues of 19.2 trillion yen and net income of 490.0 billion yen for the full year. Earlier, the company had expected full-year revenues of 19 trillion yen and net income of 350 billion yen.
In addition to an improving vehicle-sales outlook in Japan, Asia and Russia, the progress of our company-wide profit improvement activities, such as further reduction of variable costs and control over fixed costs, has exceeded our earlier expectations, Senior Managing Director Takahiko Ijichi said in a statement.
As a result, we now expect to overcome the rapid and acute yen appreciation and achieve a substantial increase in operating income. One can therefore see that our earnings are firmly recovering, Ijichi said.
Meanwhile, the U.S. government is expected to release the findings Tuesday regarding its probe into the reports of sudden acceleration issues in Toyota vehicles, prompting the automaker to recall millions of vehicles.