Toyota reports a surprising quarterly profit and slashed its annual loss forecast

It would be an understatement to say that many were surprised that Toyota Motor Corp. had recorded a quarterly profit. It appears that Toyota is now on track to continue with this success similar to what its Japanese rivals have experienced.

The quarterly profit cuts its annual loss forecast by more than half. The rise in sales and the cost-cutting measures certainly factored into this scenario. Toyota currently expects an operating loss of 350 billion yen ($3.9 billion) for the year to March 31, closer to an average projection of a 293 billion yen loss in a poll of 22 analysts by Thomson Reuters. Instead of a loss of 450 billion yen, Toyota now expects a net loss of 200 billion yen.

For the July-September quarter, Toyota noted an operating profit of 58.0 billion yen, a 66% decrease from a year earlier. However, this figure beats the estimation of five analysts that the carmaker would have a loss of 63 billion yen. Meanwhile, net profit is down 84% to 21.84 billion yen and revenue dropped 24% to 4.54 trillion yen.

Toyota had held the record as most profitable automaker but the tables are turned now as it had been the only major Japanese carmaker expected to post a loss in the latest quarter. Toyota is said to have been facing financial difficulties due to its severe overcapacity.