TOKYO — Toyota returned to profit in the October-December quarter and raised its annual earnings forecast, but analysts warned of a grim outlook as a spreading safety crisis batters the automaker's reputation.

The world's No. 1 automaker today reported a quarterly net profit of $1.7 billion and cited stronger sales of the Prius and other "green" models, as well as a recovery in the U.S. and Japan.

The results don't reflect the damage from the massive recalls linked to faulty gas pedals, announced Jan. 21. The suspension of U.S. sales of eight of its most popular models, repair costs for the recall and a consumer backlash are expected to undermine earnings in the current quarter and possibly into next fiscal year.

Toyota for the first time gave an estimate of the costs of the global recall at up to $2 billion, with $1.1 billion for repairs and $770 million to $880 million.