Toyota Q1 operating profit seen up 15 to 25 pct
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TOKYO, Aug 5 Edwina Gibbs writing for Reuters said: "Strong U.S. sales and a weaker yen are expected to help Toyota Motor Corp forge a rise in April-June operating profit of up to 25 percent, though the lack of historical data and guidance has made forecasting difficult.
Japan's biggest automaker will release quarterly earnings for the first time at 3.00 p.m. (0600 GMT) on Wednesday.
Four auto analysts surveyed by Reuters produced an average first quarter consolidated operating profit forecast of 292 billion yen ($2.46 billion).
Estimates ranged from 274 billion to 328 billion yen, a rise of between 15 to 25 percent from a year earlier.
Some of the difference in forecasts can accounted for by varying assumptions for the average dollar/yen rate in the period, which ranged from 125 yen to 130 yen.
Other factors, such as when the company will book research and development costs and extraordinary profits due to changes in pension accounting, could sway numbers greatly, analysts said.
But these factors aside, the basic trend of profit growth on the back of a strong performance in the United States and a weak yen, as seen in Toyota's earnings last business year, will not have changed in the first quarter.
A soft Japanese currency inflates the yen value of income earned abroad and makes exports more profitable.
"It's a familiar story of strength in the U.S. offsetting weakness in Japan," said Clive Wiggins at Lehman Brothers.
During the last business year that ended in March, Toyota cruised to a record profit of 1.12 trillion yen, a 29 percent leap over the the previous year, with robust sales of its Lexus luxury division in the United States doing particularly well.
The highly profitable Lexus models are not made in the United States and are exported from Japan.
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"For April-June, exports rose around 10 percent, we had the weak yen, and Lexus sales were up seven percent," said William Nestuk, analyst at WestLB Panmure.
The first business quarter is, however, expected to be the only quarter to see benefits from a weaker yen this year.
The Japanese currency has surged against the dollar since April to trade as high as 115.50 yen to the dollar.
On Monday the yen was trading at around 118.80 to the dollar.
Most analysts say Toyota, as well as rivals Honda Motor Co and Nissan Motor Co , are still on track to post record profits for the second consecutive business year, even if the yen continues to trade around 115 yen for the rest of year.
Honda, the only other Japanese automaker to release quarterly earnings, said last month that, for the time being at least, it would maintain its full year outlook of a 13 percent rise in operating profit.
Unlike most Japanese companies, Toyota does not issue consolidated income forecasts for the current business year.
It has only said it expects a 0.1 percent rise in parent operating income and a 17 percent increase in parent net profit.
Analysts are also expecting Toyota to announce concrete share buy-back plans on Wednesday.
The auto giant has shareholder approval to buy back up to 170 million of its own common shares, or up to 600 billion worth, this business year in a move to counter potential over-supply.
Fears that financial institutions will unload cross-held shares in Toyota have long put pressure on its stock.
Cross-holdings -- shares traditionally held to cement business ties -- are now subject to mark-to-market accounting rules, and banks are scrambling to cut the vulnerability of their bottom lines to stock market swings as well as loan losses. (