Toyota Beats Q3 Earnings on Revenue Strength, Guides High - Analyst Blog
Toyota Motor Corporation (TM) recorded earnings of ¥189.77 per share ($3.33 per ADR) in third-quarter fiscal 2015 (ended Dec 31, 2014), highlighting an improvement from ¥165.70 per share ($3.31 per ADR) recorded in third-quarter fiscal 2014 (ended Dec 31, 2013). Earnings per ADR also surpassed the Zacks Consensus Estimate of $3.16. The Japanese automaker posted consolidated net income of ¥600 billion ($5.26 billion) in third-quarter fiscal 2015, higher than ¥525.5 billion ($5.26 billion) posted in the year-ago quarter.
Consolidated revenues in the quarter increased 8.9% year over year to ¥7.17 trillion ($62.9 billion). Revenues also surpassed the Zacks Consensus Estimate of $51.12 billion.
Unit sales went down 2.3% year over year to 2.26 million vehicles globally. Unit sales rose 7.3% to 712,518 vehicles in North America. However, sales declined 7.8% to 497,933 units in Japan, 1.5% to 219,361 units in Europe, 11.3% to 373,895 units in Asia and 1.9% to 458,929 units in other regions (Central and South America, Oceania, Africa and the Middle East).
Operating income increased to ¥762.9 billion ($6.69 billion) from ¥600.5 billion ($6 billion) a year ago.
Segment Results
The Automotive segment’s revenues rose 8.4% to ¥6.61 trillion ($58 billion) in the quarter while its operating income improved 26.3% to ¥651.3 billion ($5.71 billion).
The Financial Services segment’s revenues moved up 20% to ¥437.7 billion ($3.84 billion), while the operating income improved 49.4% to ¥100.5 billion ($881.6 million).
All Other businesses’ revenues climbed 8.1% to ¥301.1 billion ($2.64 billion). However, operating income fell 28.3% to ¥14.8 billion ($129.8 million).
Financial Position
Toyota had cash and cash equivalents of ¥2.40 trillion ($21.1 billion) as of Dec 31, 2014, compared with ¥2.04 trillion ($20.4 billion) as of Mar 31, 2014. Total debt amounted to ¥19.25 trillion ($168.9 billion) as of Dec 31, 2014 against ¥16.33 trillion ($163.3 billion) as of Mar 31, 2014.
In the first nine months of fiscal 2015, operating net cash flow fell to ¥2.34 trillion ($21.9 billion) from ¥2.73 trillion ($27.6 billion) recorded in the year-ago period.
Fiscal 2015 Guidance
Toyota raised its consolidated revenue guidance to ¥27 trillion ($247.7 billion) from the prior guidance of ¥26.5 trillion. The revenue guidance reflects a 5.1% improvement from fiscal 2014.
Operating income guidance was also raised to ¥2.7 trillion ($24.8 billion) from ¥2.5 trillion. The new guidance implies a 17.8% year-over-year increase.
Net earnings are expected to be around ¥2.13 trillion ($19.5 billion) or ¥677.14 per share ($12.42 per ADR), improving from the prior guidance of ¥2 trillion or ¥630.37 per share. The net income guidance reflects expectations of a 16.8% improvement over fiscal 2014.
Consolidated vehicle sales for fiscal 2015 are expected to be about 9 million units, down from the prior guidance of 9.05 million units as well as 9.12 million vehicles sold in fiscal 2014.
Currently, Toyota carries a Zacks Rank #2 (Buy). Investors interested in the same industry could also consider stocks like Daimler AG (DDAIF), PACCAR Inc. (PCAR) and Tesla Motors, Inc. (TSLA). Daimler sports a Zacks Rank #1 (Strong Buy), while PACCAR and Tesla carry a Zacks Rank #2.
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