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Toyota (TM) Beats on Q4 Earnings, Expects Higher FY23 Sales

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Toyota TM posted fiscal fourth-quarter fiscal 2022 earnings of $3.34 per share, which surpassed the Zacks Consensus Estimate of $2.40 on higher-than-expected revenues. The bottom line, however, declined from the year-ago earnings of $5.18 a share amid chip woes and supply chain disruptions aggravated by the Russia-Ukraine war. Consolidated revenues came in at $69,824 million, beating the consensus mark of $68,197 million but contracting 3.8% year over year.

Toyota — currently carrying a Zacks Rank #4 (Sell) — had cash and cash equivalents of ¥6.1 trillion ($50.36 billion) as of Mar 31, 2022. Long-term debt amounted to ¥15.3 trillion ($126.1 billion). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Toyota Motor Corporation Price, Consensus and EPS Surprise

Toyota Motor Corporation Price, Consensus and EPS Surprise
Toyota Motor Corporation Price, Consensus and EPS Surprise

Toyota Motor Corporation price-consensus-eps-surprise-chart | Toyota Motor Corporation Quote

Segmental Results

The Automotive segment’s net revenues for the fiscal fourth quarter increased 5.2% year over year to ¥7.40 trillion ($63.75 billion). Operating profit came in at ¥331.1 billion ($2.85 billion), declining 39.6% year over year.

The Financial Services segment’s net revenues rose 8.9% from the prior-year quarter to ¥589.3 billion ($5.07 billion). The segment registered an operating income of ¥101.1 billion ($0.87 billion), up 3.2% from the fourth-quarter fiscal 2021 level.

All Other businesses’ net revenues totaled ¥367.3 billion ($3.16 billion) in the reported quarter, rising 6.1% from the comparable year-ago period. The unit generated an operating profit of ¥22 billion ($0.19 billion), down 39.4% year over year.

FY23 Guidance

For fiscal 2023, Toyota projects consolidated vehicle sales of 8.85 million, indicating an increase from 8.23 million units sold in fiscal 2022. Fiscal 2023 sales are expected to total ¥33 trillion, implying an increase from ¥31.4 trillion recorded in fiscal 2022. Operating income is projected at ¥2.4 trillion, indicating a decline of 19.8% year over year.

Pretax profit is estimated at ¥3.1 trillion, down from ¥4 trillion generated in fiscal 2022. R&D expenses are envisioned at ¥1,130 billion, suggesting a nominal rise from ¥1,124 billion spent in fiscal 2022. Capex is forecast at ¥1.4 trillion, signaling an uptick from ¥1.34 trillion spent in fiscal 2022.

Quarterly Releases of Other Legacy Automakers

While the Japanese auto giant surpassed earnings estimates, U.S. auto biggie Ford F missed the same, while its close peer General Motors GM delivered an earnings beat.

General Motors reported first-quarter 2022 adjusted earnings of $2.09 per share, topping the Zacks Consensus Estimate of $1.56. Better-than-expected contributions from North America, International and Financial segments drove the outperformance. The bottom line, however, compared unfavorably with the year-ago quarter’s earnings of $2.25 per share. Revenues of $35,979 million missed the Zacks Consensus Estimate of $36,252.5 million. The top line compares favorably with the year-ago figure of $32,474 million.

General Motors had cash and cash equivalents of $16,349 million as of Mar 31, 2022. The long-term automotive debt at the end of the quarter was $16,155 million. The company recorded an adjusted automotive free cash flow of $6 million in first-quarter 2022. For 2022, the company expects full-year net income to be in a range of $9.6-$11.2 billion, higher than the previous range of $9.4-$10.8 billion. The adjusted EBIT forecast remains unchanged in the range of $13.0 billion to $15.0 billion. The estimate for adjusted EPS was increased from the previous range of $6.25-$7.25 to $6.5-$7.5.

Ford reported adjusted earnings of 38 cents per share for first-quarter 2022, missing the Zacks Consensus Estimate of 39 cents. Lower-than-expected profits in North America and a wider-than-expected pretax loss in China led to this underperformance. The bottom line compares unfavorably with the year-ago quarter’s earnings of 89 cents. The company’s consolidated first-quarter revenues came in at $34.5 billion, down 4.9% year over year. In the first quarter, the total revenues from the automotive business declined 4% to $32.1 billion and missed the Zacks Consensus Estimate of $39.1 billion.

Ford reported a negative adjusted FCF of $580 million during the quarter. It had cash and cash equivalents of $10,579 million as of Mar 31, 2022 and the automotive long-term debt stood at $17,158 million. Ford expects adjusted EBIT for 2022 between $11.5 billion and $12.5 billion, implying an uptick of 15-25% from the 2021 level. Moreover, 2022 vehicle wholesale volumes are anticipated to jump 10% to 15%. Adjusted FCF is envisioned in the range of $5.5-6.5 billion for 2022, suggesting a jump from $4.6 billion recorded in 2021.


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