TOKYO — Toyota cruised back to profit in the latest quarter as the world's top carmaker cut costs and hitched a ride on the global auto sales recovery while fighting to salvage its reputation for quality. But the automaker's top executive and analysts alike said Toyota is still far from a full recovery while another potential blow to its image looms after U.S. federal authorities launched a fresh investigation into a steering recall.
Toyota said Tuesday that January-March profit totaled 112 billion yen ($1.2 billion) compared with a 766 billion yen loss the year before.
Quarterly revenue jumped to 5.28 trillion yen ($57 billion) from 3.54 trillion yen a year earlier, when purchases of cars and other vehicles were slumping amid the global financial crisis.
Toyota, which has its largest North American plant in Georgetown, Ky., is forecasting even better results for the fiscal year through March 2011, projecting annual profit to rise 48 percent to 310 billion yen ($3.3 billion).
Whether the world's biggest automaker can continue its recovery rests in part on salvaging its reputation after recalling more than 8 million cars worldwide for faulty gas pedals, a braking software glitch, faulty floor mats and other defects. The company faces more than 300 state and federal lawsuits in the United States alone from claims of unintended acceleration.
On Monday, the U.S. National Highway Traffic Safety Administration said it is carrying out a new investigation into Toyota to see whether it had stalled on a recall for a steering defect in 2005 in the United States. It had carried out recalls for similar problems in Japan in 2004.
Toyota has already paid a maximum fine of $16.4 million for dallying on a recall for acceleration problems, and NHTSA could slap it with a fine of up to that amount again over the steering issue.
The latest results appear to show Toyota has managed to contain the damage from the spate of recalls — at least, so far.
"There's still a long way to go before a full recovery," said author Masaaki Sato, who has written books on the history of Toyota. "It barely managed to return to the black."
Sato said the latest results show a Toyota that's weakened compared with its heyday just a few years ago when its profits were booming, its models were topping consumer surveys and annual global sales were approaching 10 million vehicles.
Toyota officials said the company spent 100 billion yen on recall-related measures, and lost between 70 billion yen and 80 billion yen in sales during the year ended March 31.
They were vague about such damage for the current year, except to say Toyota estimates spending 80 billion yen for incentives to boost sales.
Sales have held up in recent months thanks to unprecedented incentives that have lured back customers in North America as well as growth from fast-growing Asian nations like China.
For the fiscal year through March 31, Toyota posted a 209 billion yen ($2.3 billion) profit, a dramatic reversal from a 437 billion loss in the previous fiscal year, which was the automaker's worst annual red ink since being founded in 1937.
The annual results were much better than analysts' forecasts and Toyota's cautious, internal forecast for an 80 billion yen profit.