Toyota boosted by rising sales and falling loan defaults in North America. It's financial services arm there accounted for 85 percent of operating profit for the region.

Despite its recent recall woes Toyota is now back in the black.

The Japanese automaker posted a $2.2 billion (€1.67 billion) profit for the first quarter of this year, compared to an $850 million (€645 million) loss last year. Much of it was due to a rebounding auto market in the United States where a fall in loan defaults and rising sales produced boyant numbers at Toyota's financial services arm which accounted for 85 percent of its total North American operating profit.

Given the sunnier outlook, Toyota has revised its forecast upward for total global sales for the current fiscal year ending March 31, 2011. Toyota projects it will sell 7.38 million units around the world in that period.

There is more good news for Toyota, which took a hit on U.S. consumers' view of the brand with the recalls. According to YouGov BrandIndex, a company that tracks consumers' attitudes towards brands, Toyota is back to an overall positive image.

But Toyota is still operating in the red in Europe. The company reported a loss of $79 million (€60 million) for the first quarter for its European operations. Still, an improvement over the previous $158 million (€120 million) loss for the same period last year.

Gallery: What recall crisis? Toyota posts $2.2billion 2nd quarter profit