Toyota on Tuesday said its net profit for the three months to June jumped 10% from a year ago, giving a boost to its annual sales forecast and crediting a weak yen and cost cuts.
The Corolla and Camry maker earned 646 billion yen ($5.2 billion) in the quarter, while revenue rose 9.3% to 6.98 trillion yen, as it separately announced an overhaul of its operations in China, the world's biggest vehicle market.
The Japanese giant's vehicle sales, however, were slightly lower at 2.1 million vehicles in the quarter.
"Favourable foreign exchange rates and cost reduction efforts were (the) main positive factors, while decreased vehicle sales and increased expenses...were negative factors," Toyota Managing Officer Tetsuya Otake said in a statement.
A steep slide in the yen has helped make Japanese automakers more competitive overseas while it inflated the value of their repatriated overseas profits.
Toyota said it now expected revenue for the fiscal year to March 2016 to come in at 27.8 trillion yen, edging up from an earlier 27.5 trillion yen estimate, while net profit would be 2.25 trillion yen for the year.
"Toyota has benefitted from the weak yen and strong sales in North America, while sales of its Lexus models have been steady," said Tokyo-based auto analyst Takaki Nakanishi.
Last quarter, sales in the key North American market rose, while they turned down in Europe and Asia, including Toyota's home market Japan, where consumer spending dived after the government hiked sales taxes last year.
The company did not break out sales for China in the period, but GM and Volkswagen have been outselling Toyota in the huge market.
Separately, Toyota said it was reorganising its Chinese operations, including adding a new production line at one plant that would boost capacity by 100,000 vehicles annually.
The changes underline a "commitment to plants that are competitive, rather than plants that simply aim to maximise production", it said. Toyota has been focusing on squeezing out productivity gains and better use of existing plants -- it put on hold building new factories for several years.
The company began operating a new Thai plant in 2013, but then halted investment as the global car market struggled with oversupply and weak demand.
In April, the company announced it was ending the construction freeze as it unveiled plans for a $1.0 billion plant in rising Mexico.
The firm is also overhauling its production methods, vowing to slash development costs in a bid to offset any downturn in the market.
Last week, rivals Honda and Nissan both reported strong results, but observers warned over the threat of a China slowdown and costs tied to a massive exploding airbag crisis.
"Concerns over recalls related to Takata's airbags continue to cast a shadow on the sector," said Yasuo Imanaka, analyst at Rakuten Securities in Tokyo. "Unexpected, massive recalls are a sizable risk for any automaker."
Toyota is working to recover its reputation for safety after the recall of millions of cars globally for various problems, including the problems at embattled supplier Takata. Its defective airbags have been blamed for eight deaths and scores of injuries around the world.
The defect -- thought to be associated with a chemical propellant that helps inflate the airbags -- can cause them to deploy with explosive force, sending metal shrapnel hurtling toward drivers and passengers.
Ten global automakers, also including General Motors and Germany's BMW, are being forced to recall some 34 million cars in the United States alone to replace the inflators -- the biggest recall in US history.