Toyota posts higher profit, lifts forecasts

TOKYO, Nov 7 (Reuters) Toyota Motor Corp. , the world's most profitable car maker, reported a 2.7 percent rise in quarterly operating profit fuelled by a weaker yen, sales rise and cost cuts, and it lifted its full-year forecasts after stronger-than-expected results so far.

Please double click on [ID:nT7D0C9TGK] for a table of the results, [ID:nT7CK3SMZ5] for the forecasts, [ID:nSP340426] for accompanying story, [ID:nTKV002896] for Toyota's plan to buy back up to 15 million shares and [ID:nT337034] for executive's statment on North American profitability.

Following are initial reactions of analysts and investors: ATSUSHI KAWAI, ANALYST, MIZUHO INVESTORS SECURITIES ''The mid-term results were in line with expectations, and although there were some hopes for a bullish upward revision, the one we got reflects the strong results while still erring on the side of caution.'' TAKESHI OSAWA, SENIOR FUND MANAGER, NORINCHUKIN ZENKYOREN ASSET MANAGEMENT ''Good earnings -- I'm impressed. But Toyota could do a bigger share buyback given the current share price.

''Its large exposure to North American market is a cause for concern. It could fare better if it relies less heavily on North America, like Suzuki, which has a strong presence in Asia. In the United States, subprime problems could negatively impact auto loans. If that happens, even competitive Japanese cars may need more incentives.

''If oil prices keep rising, it may help Toyota with hybrid sales. It depends on whether Toyota's gain in market share can more than offset slowdown in overall U.S. consumption.

''I don't see any particular reason Toyota's shares are underperforming. Toyota has been affected most by the sell-off in Japanese shares because of its size and weight in the market.'' TATSUO YOSHIDA, ANALYST, UBS SECURITIES ''The numbers are a bit light but at this level are within the range of expectations.

''Their guidance is still conservative. 2008 operating profit of 2.3 trillion yen still has room for an upside surprise.'' ''Toyota shares have been the biggest underperformers but they are my No. 1 pick. (The shares) at these levels are already discounting these results, so I don't really expect downward pressure from here, but at the same time, there is no positive catalyst.'' TOMOMI YAMASHITA, FUND MANAGER, SHINKIN ASSET MANAGEMENT CO LTD ''The earnings numbers are not bad. The share buyback plan is also positive. The stock is unlikely to fall on these results.

''But the impact of the high yen is a worry and Toyota shares are not doing well due to concern about the outlook for the U.S.

economy. The United States is where Toyota has generated hefty profits and is currently facing negative problems.'' MARKET ACTION: Toyota shares closed up 0.8 percent at 6,440 yen ahead of the results announcement.

REUTERS BJR RN1209