Published: May 11, 2010 9:45 AM EDT

TOKYO (AP) - Toyota cruised back to profit in the latest quarter

as the world's top carmaker cut costs and hitched a ride on the

global auto sales recovery while fighting to salvage its reputation

for quality.

Toyota Motor Corp. said Tuesday that January-March profit

totaled 112 billion yen ($1.2 billion) compared with a 766 billion

yen loss the year before.

Quarterly revenue jumped to 5.28 trillion yen ($57 billion) from

3.54 trillion yen a year earlier, when purchases of cars and other

vehicles were slumping amid the global financial crisis.

Toyota is forecasting even better results for the fiscal year

through March 2011, projecting annual profit to rise 48 percent to

310 billion yen ($3.3 billion).

Whether the world's biggest automaker can continue its recovery

rests in part on salvaging its reputation after recalling more than

8 million cars worldwide for faulty gas pedals, a braking software

glitch, faulty floor mats and other defects.

On Monday, the U.S. National Highway Traffic Safety

Administration said it is carrying out a new investigation into

Toyota to see whether it had stalled on a recall for a steering

defect in 2005 in the U.S. It had carried out recalls for similar

problems in Japan in 2004.

Toyota has already paid a maximum fine of $16.4 million for

dallying on a recall for acceleration problems, and NHTSA could

slap it with a fine of up to that amount again over the steering

issue.

U.S. Transportation Secretary Ray LaHood, who is in Japan to

visit Toyota and inspect high-speed trains, said Monday that

additional fines may be levied against Toyota.

President Akio Toyoda, who is the grandson of the automaker's

founder, said Tuesday the company was cooperating with the

investigation, but did not elaborate.

Toyoda, appointed president in June last year, acknowledged that

his job was similar to steering a ship in the middle of a storm. He

said the ship was sailing toward what appeared to be sunny skies

because employees were working together 'in one spirit."

"I feel that I am now at last standing at the starting point

with the latest earnings," he told reporters at Toyota's Tokyo

office. "This year will mark a new beginning for Toyota."

Toyota managers have given up their bonuses since the global

fallout from the collapse of investment bank Lehman Brothers sent

the automaker into the red.

Toyoda said that will continue and they will also return a

portion of their monthly salaries to take responsibility for the

recall mess, although he did not give figures.

The latest results appear to show Toyota has managed to contain

the damage from the spate of recalls - at least, so far.

Toyota officials said the company spent 100 billion yen on

recall-related measures, and lost between 70 billion yen and 80

billion yen in sales during the year ended March 31.

They were vague about such damage for the current year, except

to say Toyota estimates spending 80 billion yen for incentives to

boost sales.

Although sales have held up in recent months, much of that came

from unprecedented incentives to lure customers in North America as

well as growth from fast-growing Asian nations like China.

For the fiscal year through March 31, Toyota posted a 209

billion yen ($2.3 billion) profit, a dramatic reversal from a 437

billion loss in the previous fiscal year, which was the automaker's

worst annual red ink since being founded in 1937.

The annual results were much better than analysts' forecasts and

Toyota's cautious, internal forecast for an 80 billion yen profit.

Global sales for the year ended March 31 totaled 7.24 million

vehicles, down 4 percent from the previous year. Toyota is

expecting that to improve to 7.29 million for the current fiscal

year.

Toyota is forecasting revenue to improve 1.3 percent to 19.2

trillion yen for the year through March 2011, from 18.95 trillion

yen for the year ended March 31. That had marked a 7.7 percent

decline from the previous year.

Toyota said it has figured in costs for recall-related expenses

in its forecasts for the current fiscal year.

"To achieve further profit recovery, what we need to do is

offer high quality, reasonably priced vehicles," said Toyoda,

while stressing that tough times were likely to continue.

Toyota's stock price slipped 0.7 percent to 3,495 yen in Tokyo.