TOKYO (AP) — Toyota Motor Corp. reported a surprise profit yesterday and cut its projected red ink for the year by half, adding to growing evidence that carmakers are starting to recover from the deepest industry downturn in years.

Although far from a full-fledged turnaround, Toyota's results showed the healing effects of government stimulus measures to spur sales of environmentally friendly cars and other vehicles, as well as soaring demand in emerging markets like China. Rivals Honda Motor Co. and Nissan Motor Co. have also issued healthier reports and outlooks recently.

For the July-September quarter Toyota, the world's largest car company, posted better-than-expected net income of 21.8 billion yen ($242 million) after three straight losing quarters.