TOYOTA'S quarterly profit slid 13.5 percent on production setbacks caused by last year's tsunami disaster and the flooding in Thailand, but Japan's top automaker raised its annual earnings forecast, saying a recovery is on track.

Toyota Motor Corp reported yesterday an 80.9 billion yen (US$1.05 billion) profit for the October-December third quarter, down from 93.6 billion yen a year earlier.

Showing confidence in its ability to bounce back, the manufacturer of the Prius gas-electric hybrid, Lexus luxury models and the Camry sedan raised its annual profit forecast to 200 billion yen from 180 billion yen.

Still, the higher forecast is barely half of what Toyota raked in the previous fiscal year at 408 billion yen.

Last year was tough for Japanese automakers as the earthquake and tsunami in northeastern Japan devastated key suppliers. The flooding in Thailand in late 2011 hit them with new supply problems just as they were starting to recover from the March disaster.

Toyota Senior Managing Officer Takahiko Ijichi pointed to the strong yen as also behind the declining profits.

The dollar dropped to about 77 yen for the latest quarter from 83 yen the same period in 2010.