NEW YORK (TheStreet) -- Toyota (TM - Get Report) posted a record profit of $5.2 billion in its fiscal first quarter on a strong performance overseas that was boosted by a weak yen and as the automaker overcame faltering vehicle demand in China.
Toyota's performance in the U.S., its most important market, reflected higher transaction prices for its vehicles as its share of the market recovers slowly from its post-recession collapse. Toyota's U.S. sales are dominated by Corolla and Camry sedans at a time when consumers are showing their preference for pickups, SUVs and crossovers of all sizes.
The Japanese automaker, whose first-half global vehicle sales were surpassed by those of Volkswagen, beat analysts' forecasts for the quarter. The mean profit estimate of analysts polled by Thomson Reuters was 607.5 trillion yen; Toyota reported 699 trillion yen, a gain of 9.4% from a year ago.
Despite the positive earnings surprise, Toyota shares and its ADRs fell in an overall down market.
Factoring out the yen's weakening during the past year, Toyota's operating profit fell 12%.
The weaker yen over the past year helped the competitiveness of Toyota exports from its home market, and a weaker yen increases the value of dollar-denominated profits when they are booked. Last year at this time, the yen averaged about 102 to the dollar; this year, the yen is 124 to the dollar.
"While Toyota appears to be keeping pace with the U.S. market so far this year, it is clear that its position is not as dominant as it has been in the past," said Eric Ibarra, an analyst specializing in vehicle values for Kbb.com. "Consumer preferences have shifted away from cars and toward trucks and utility vehicles, helping domestic manufacturers that have a heavier truck lineup."
The automaker's average transaction price for each vehicle sold in the U.S. during the second quarter was $30,514, according to Kelley Blue Book, up 2% from $29,918 a year ago.
In the second quarter of 2008, shortly before the Lehman Brothers meltdown, Toyota's U.S. market share stood at 17.4%; by the second quarter of 2011, following Japan's earthquake and tsunami, as well as sudden acceleration problems with its cars, its share had dropped to 11.6%. In the latest second quarter, Toyota's share had recovered to 14.4%. (Each point of share translates to about about 170,000 vehicles sold).
Toyota's Tundra full-size pickup truck, manufactured in San Antonio, Texas, has struggled to gain traction in recent years against Ford's (F - Get Report) F Series, Fiat Chrysler's (FCAU - Get Report) Ram and General Motors (GM - Get Report) Chevrolet Silverado and GMC Sierra models. Tundra accounts for around 6% of the market, which lately has turned red-hot in terms of sales and pricing.
The No. 1 Japanese automaker, by unit sales, this week will be unveiling a new version of its Tacoma midsize pickup truck, a model that contends against two new midsize pickups from GM.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.