Takata Corp., the maker of air bags linked to a global auto safety crisis, posted a profit as it sought permission from carmakers to spread out its recall costs.
Net income was 3.1 billion yen ($25 million) for the three months ended June, the Tokyo-based company said Thursday. That compares with the 38.6 billion yen loss a year earlier. The safety component maker raised its annual operating profit and sales forecasts.
Weeks after beginning its fiscal year with optimism for turning an annual profit, Takata gave in to U.S. regulators that had been pressing the company for nationwide recalls of its faulty air bags. The company has asked carmakers to let it use installments to pay costs related to replacing the devices, which can rupture during deployment and sprayed metal and plastic at passengers.
Takata posted a profit and raised forecasts due to strong sales in the U.S. and China and better than expected demand in Japan, Hideyuki Matsumoto, a spokesman, said by phone. It boosted projections for sales by 2.9 percent to 720 billion yen and operating profit by 18 percent to 40 billion yen in the year ending March.
The company had 70.5 billion yen set aside in reserves against recall costs at the end of June. Its recall-related loss for the quarter was 5.4 billion yen.
Takata President Shigehisa Takada made his first public apology in June for eight deaths and about 130 injuries linked to the company’s air bag inflators.
While it’s bowed to regulators demands for more recalls, Takata last month rejected a U.S. Senator’s request to set up a fund that would compensate people injured or killed by its air bags. The company’s spending on federal lobbying climbed to $390,000 during the quarter ended in June, up 22 percent from the first three months of the year.