Toyota Motor Corp. (NYSE: TM) reported earnings for the quarter ending June 30–its fiscal first quarter–and the numbers were sterling even though it has recalled nearly nine million of its vehicles.

Revenue reached 4,872 billion yen, up 27% from the same period a year ago. Operating income was up to 406 billion yen. The company attributed the better results to improved sales and better financial results from its financial services arm. The profit was $2.2 billion when translated into dollars

Vehicles sales  jumped worldwide to 1.82 million up 419,000 units from the period last year.

Toyota raised its estimates for the balance of its fiscal year. It forecast total vehicle sales of 7.38 million up from 7.29 billion in the year earlier period. Toyota also experts revenue to move up to 19.5 trillion yen and operating income to increase to 330 billion yen.

The figures are doubly impressive because the April through June period occurred during the height of the company’s recall problems.

Global car sales are not expected to move up much worldwide, with the exception of China, so Toyota expects to do about as well as the worldwide market, if not better.

It is hard to give a reason the No.1 car company in the world could do so well. It must be, to some extent, the result of the brand loyalty it has built over nearly five decades, including nearly 30 years in the US market, which was the world’s largest until last year when its was bested by China. Toyota’s reputation for building quality cars put it at the top of customer satisfaction surveys for years.

Toyota may still face sanctions and liability suits because of its recall and defect problems, but its overall financial health seems fine.

Douglas A. McIntyre

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