Toyota Motor lifted its operating profit guidance by 8 percent on Wednesday as a weaker yen increases the value of sales overseas and makes up for slumping demand at home.
The world's biggest automaker now expects record operating profit of 2.70 trillion yen ($22.93 billion) for the year ending March 31. That compared with a previous forecast of 2.5 trillion yen as well as the 2.762 trillion yen average estimate of 30 analysts polled by Thomson Reuters I/B/E/S.
For October-December, Toyota said operating profit grew 27 percent to 762.88 billion yen, versus the 690.21 billion yen estimate of 15 analysts. It also changed its U.S. dollar-yen exchange rate assumption to 109 yen for the current year, from 104 yen.
The yen's decline has been a boon for Toyota, which exports roughly half of its vehicles produced in Japan. Cost-cutting undertaken when the yen hovered at record highs in recent years has also helped the automaker's bottom line.
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In the United States, Toyota's biggest market, the automaker has outperformed Japanese rivals thanks to a line-up that spans all vehicle categories. Cheaper fuel has hit sales of the Prius and other green models but fanned demand for its Lexus luxury brand, pickup trucks and other high-margin vehicles where Japanese peers have fewer offerings.
Company watchers are now awaiting the end of Toyota's three-year freeze on new factories through March 2016, aimed at preventing unchecked expansion. In the meantime, capacity constraints are widely expected to curb sales growth.
Last month, Toyota said it expects its global sales to drop 1 percent this calendar year, dragged down by a sharp decline in Japan, where car sales are dwindling due to the lingering effect of a sales tax hike last April.
Shares of Toyota ended 2.4 percent higher ahead of the earnings announcement, versus a 2.0 percent gain in the benchmark index.