Although Toyota has reported a quarterly decline to operating income, it has raised the outlook for the rest of the year on projections of a weaker yen.

Toyota’s operating income in the quarter ended June 30 decreased by 67.9 billion yen (-10.6%, year-on-year). Toyota said that major factors contributing to the decrease included currency fluctuations of 35 billion yen and an increase in expenses of 45 billion yen offset by an increase of 50 billion yen due to cost reduction efforts.

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Toyota revised up its consolidated financial forecasts for the fiscal year. Based on an exchange rate assumption of 110 yen to the US dollar and 124 yen to the euro (compared to earlier estimates of 105 yen to the US$ and 115 yen to the euro), TMC now forecasts consolidated net revenue of 28.5 trillion yen, operating income of 1.85 trillion yen, income before income taxes of 2.05 trillion yen, and net income of 1.75 trillion yen.

“Due to a weaker yen we’ve changed our currency assumption rate, and we’ve implemented additional marketing measures and cost reductions,” senior managing officer Tetsuya Otake told reporters at a briefing, according to Reuters.

Toyota consolidated vehicle sales for the first quarter totalled 2,215,111 units, an increase of 42,452 units compared to the same period last fiscal year. On a consolidated basis, net revenues for the period totalled 7.0476 trillion yen, an increase of 7.0%. Operating income decreased from 642.2 billion yen to 574.2 billion yen (-10.6%), while income before income taxes was 679.3 billion yen. Net income increased from 552.4 billion yen to 613 .0 billion yen.

Toyota posted a 1% rise in North American vehicle sales to 723,000 due to strong demand for its recently launched C-HR compact SUV model, while sales in Asia, including in China, fell 5.4% in the quarter to 363,000.

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