Tuesday, February 2, 2010

Toyota Motor Corp. (NYSE: TM): Q3 Earnings Preview 2010

Toyota Motor Corp. (NYSE: TM), the world's largest automaker, is scheduled to release its fiscal third quarter 2010 earnings on Thursday, February 4, 2010. Analysts, on average, expect the company to report a loss of 6 cents a share on revenue of $38.32 million. In the year ago quarter, the company reported a loss of $1.09 per share on revenue of $3.38 billion.
Toyota Motor Corporation operates in the automotive industry worldwide. It engages in the design, manufacture, assembly, and sale of passenger cars, minivans, and trucks and related parts and accessories.
In the preceding fiscal second quarter, the Toyota City, Japan-based company reported 84.4% drop in profit, reflecting sharp decline in vehicle sales in all regions, as well as the negative impact of the yen's appreciation. On U.S. GAAP basis, consolidated net income attributable to the company for the second quarter fell to 21.8 billion yen from last year's 139.8 billion yen.Net revenues for the quarter were 4.54 trillion yen, down 24% from 5.98 trillion yen in the same period a year ago.
Vehicle sales in the quarter fell 16.2% to 1.73 million units from last year's 2.06 million units, with sales in Japan declining to 496 thousand units from 504 thousand units a year ago, and overseas sales declining to 1.23 million units from 1.56 million units last year. Sales in North America totaled 518 thousand units, down from prior year's 629 thousand units.
The automaker sold 7.81 million vehicles worldwide in 2009, a decline of 13% from the last year.
In November, the automaker cut down its fiscal 2010 net loss and operating loss forecast, and lifted revenue view on anticipated higher vehicle sales and demand-stimulating measures by governments worldwide. However, the company added that the outlook for global vehicle demand still remains uncertain. The company now expects consolidated net loss attributable to the company of 200 billion yen or 63.78 yen per basic share, compared to previous loss forecast of 450 billion yen.
Full-year consolidated net revenues is estimated to be up to 18.0 trillion yen, while previous forecast was 16.80 trillion yen, and operating loss is currently projected to be 350 billion yen, compared to previous loss projection of 750 billion yen. The revised revenue forecast reflects a 12.3% decline from last year's revenues. Further, Toyota projects consolidated vehicle sales of 7.03 million units, compared with prior guidance of 6.6 million units, an increase of 430 thousand units. In the year 2009, the company's consolidated vehicle sales were 7.57 million units. The growth in vehicle sales forecast is expected to results from Japan, North America, Asia and other regions, except Europe.
Toyota Motor Corp. intends to sell 8.27 million vehicles throughout the world this year 2010, an increase of 6% from the previous year.
The company's sales improved in the final quarter of year 2009 as government measures spurred car demand. The U.S., Germany, Japan and China offered consumers credits, tax breaks and subsidies for trading in old cars as the worst slump in decades for the car industry forced Chrysler LLC and General Motors Corp. into bankruptcy. Toyota Motor's December U.S. sales grew by 32.3% from same period last year.Similarly, sales for November 2009 increased 20% year-on-year.
However, the company's brand image has suffered hugely due to the recent recall fiasco. On January 21, Toyota had announced that it would recall approximately 2.3 million vehicles to correct sticking accelerator pedals on specific Toyota Division models. Recently, it announced details of a plan to repair the gas pedals in 2.3 million vehicles that were recalled. It also said that it expects to restart production of eight U.S. models affected by the recall on Feb. 8. Some of the production lines at five North American plants manufacturing such vehicles as its Camry sedan and Corolla compact suspended operations this week as the company was looking for a remedy for the recall.
The company's stock currently trades at a forward P/E (fye 31-Mar-11) of 24.67. In terms of stock performance, Toyota shares have gained 20 percent over the past year.

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