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Toyota's (TM) Q1 Earnings Beat, Revenues Increase Y/Y

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Toyota Motor Corporation’s (TM - Free Report) earnings came in at $3.65 per ADR in first-quarter fiscal 2018 (ended Jun 30, 2017). Earnings surpassed the Zacks Consensus Estimate of $2.68. However, the Japanese automaker reported consolidated net income of ¥613 billion ($5.52 billion) in the quarter, up 11% from the year-ago period.

Consolidated revenues increased 7% year over year to ¥7.05 trillion ($63.51 billion) in the reported quarter. This figure comfortably surpassed the Zacks Consensus Estimate of $60.89 billion.

Consolidated unit sales went up to 2.22 million vehicles globally, an increase of 42,452 units compared with the year-ago quarter.

Operating income declined 10.6% to ¥ 574.2 billion ($5.17 billion).

Toyota Motor Corp Ltd Ord Price, Consensus and EPS Surprise

Segment Results

All figures mentioned below are U.S. GAAP-based.

The Automotive segment’s net revenues rose to ¥6.37 trillion ($57.39 billion) in the reported quarter in comparison to ¥6.02 trillion ($55.74 billion) in the year-ago quarter, while operating income tumbled to ¥489.3 billion ($4.41 billion) from the year-ago figure of ¥543.4 billion ($5.03 billion).

The Financial Services segment’s net revenues rose to ¥503.7 billion ($4.5 billion) in the reported quarter in comparison to ¥438.9 billion ($4.1 billion) in the year-ago quarter, while operating income tumbled to ¥75.3 billion ($678.4 million) from the year-ago figure of ¥90.2 billion ($835.2 million).

All Other businesses’ net segmental revenues rose to ¥337.9 billion ($3 billion) in the reported quarter compared with ¥249 billion ($2.3 billion) in the year-ago quarter, while operating income rose to ¥13.6 billion ($122.5 million) from the year-ago figure of ¥10.3 billion ($95.4 million).

Financial Position

Toyota had cash and cash equivalents of ¥2.9 trillion ($26.1 billion) as of Jun 30, 2017 compared with ¥3 trillion ($27.8 billion) as of Mar 31, 2017. Long-term debt amounted to ¥10.3 trillion ($92.8 billion) as of Jun 30, 2017 compared with ¥9.9 trillion ($91.67 billion) as of Mar 31, 2016.

In first-quarter fiscal 2018, operating net cash flow was ¥1.07 trillion ($9.64 billion) compared with ¥1.18 trillion ($10.93 billion) recorded in the year-ago period.

Fiscal 2018 Guidance

Toyota reiterated its consolidated vehicle sales guidance for fiscal 2018 to 8.90 million units compared with the 8.97 million units recorded in fiscal 2017.

Consolidated net revenues are expected to be ¥ 28.5 trillion ($259.1 billion), reflecting a 0.4% decline over fiscal 2017.

The operating income guidance is ¥1.85 trillion ($16.82 billion) compared with the previous guidance of ¥1.6 trillion ($15.2 billion) for 2018, implying a 19.8% decrease from fiscal 2017.

Net earnings are expected to be around ¥2.05 trillion ($18.63 billion) from the previous guidance of ¥1.5 trillion ($14.3 billion) in fiscal 2018. The net income guidance reflects an 18.1% decrease.

Price Performance

Toyota’s shares have climbed 2.6% in the last three months, underperforming the 3.3% increase of the industry it belongs to.



Zacks Rank & Key Picks

Currently, Toyota carries a Zacks Rank #3 (Hold).

Some other automobile stocks worth considering are Fox Factory Holding Corp. (FOXF - Free Report) , Wabco Holdings Inc. and Westport Fuel Systems Inc. (WPRT - Free Report) , all currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fox Factory has a long-term growth rate of 15.9%.

Wabco has an expected long-term earnings-per-share growth rate of 17.5%.

Westport Fuel has an expected earnings growth rate of 30% over the long term.

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