The world's biggest automaker by vehicle sales stuck by its forecast made in May for an operating profit of 2.5 trillion yen ($22.93 billion) for the current fiscal year, trailing an average forecast for a 2.88 trillion yen profit, according to analysts polled by Refinitiv.
Honda swung to a first-quarter operating profit that was double analyst expectations and raised its full-year forecast by 18% to an operating profit of 780 billion yen in the current financial year based on strong sales.
Both automakers cautioned that a global chip shortage and rising COVID-19 cases were weighing on their outlooks, though Honda said it had boosted its forecast because of its cost-cutting efforts.
Toyota said it was also benefitting from a cost improvement programme.
"We will continue these activities in the future, but the situation is still unpredictable due to the expansion of COVID-19 in emerging countries, semiconductor shortage, and soaring material prices," Toyota said in a statement.
Toyota's operating profit soared to 997.49 billion yen ($9.15 billion) for the three months ended June 30 from the pandemic-hit first quarter of last year, and was higher than analysts' average estimate of 752 billion yen.
Profit for the latest quarter was also boosted by favourable foreign exchange movements.
Toyota maintained its forecast for 8.7 million vehicle sales in the current fiscal year, up from 7.65 million last year. Sales volumes in the first quarter recovered to near 2019 levels and the ratio of electrified vehicles rose steadily, it said in an investor presentation.
Honda, Japan's No.2 automaker by sales, lowered its full-year auto sales forecast to 4.85 million vehicles from 5 million previously due to the chip shortage. It sold 4.55 million vehicles last year.
Toyota has been stockpiling semiconductors, used in everything from engine maintenance to car safety and entertainment systems, amid a global supply shortage that has hit production at rivals such as Hyundai Motor Co and Ford Motor Co.
It has benefitted from a business continuity plan developed in the wake of the Fukushima earthquake in 2011 that required suppliers to stockpile anywhere from two to six months' worth of chips depending on the time it takes from order to delivery, Reuters reported in March.
The global semiconductor chip shortage will cost automakers $110 billion in lost revenues this year, consulting firm AlixPartners said in May.
On Tuesday, General Motors Co said it will shut down several North American plants because of the shortage, including three next week.
Toyota too has not gone unscathed.
It has faced production difficulties in Thailand, where it suspended vehicle production last month at three of its manufacturing plants due to a pandemic-related parts shortage.
Honda said its China sales had risen only slightly in the first quarter due to the impact of the chip shortage.
The automaker suspended production at its plant in Wuhan, China, on Aug. 3 due to a COVID-19 case cluster that developed at one of its parts suppliers, its executive vice president Seiji Kuraishi told reporters, though he said the stoppage was not expected to last long. ($1 = 109.0400 yen)
(Reporting by Maki Shiraki in Tokyo and Norihiko Shirouzu in Beijing; Writing by Jamie Freed; Editing by Muralikumar Anantharaman) ((firstname.lastname@example.org;))