The Corolla and Prius hybrid maker posted a net profit of ¥613bn ($5.6bn) in the three months to June as revenue rose 7.0% to ¥7.05tn.
Quarterly operating profit, however, fell nearly 11% to ¥574.3bn, partly owing to currency fluctuations, it said.
Toyota, which lost its crown as the world’s top-selling automaker in 2016, now expects profit for the year to March 2018 to come in at ¥1.75tn, up from an earlier ¥1.5tn forecast, as it forecasted a downturn in the yen.
Vehicle sales were 2.59mn units in the quarter, slightly up from 2.52mn units a year ago.
Demand rose in North America, Europe, Central and South America, Africa and the Middle East. Sales also rose in Toyota’s home market, Japan, but they fell in the rest of Asia.
The auto giant last year suffered its first drop in annual profit in five years, as it pointed to the cost of customer incentives in the key US market.
Quarterly operating profit in the North American market tumbled by nearly half from a year ago owing to those marketing costs, which can include low-interest financing, cash-back rebates and other perks. “Toyota is facing tough competition in the North American market due to a delay in its shift to pickups and SUVs,” Satoru Takada, an analyst at Tokyo-based research and consulting firm TIW, told AFP ahead of the earnings.
US auto sales have been sputtering, forcing automakers to boost incentives to land customers.
“Foreign exchange is a key factor for the industry,” Takada added.
“Current levels are relatively positive for the Japanese auto industry.”