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Toyota (TM) Earnings Beat, Revenues Miss Estimates in Q3

Zacks Equity Research

Toyota Motor’s TM shares moved up 1.5% to close the trading session at $143.85 on Feb 6, after it reported improved year-over earnings in third-quarter fiscal 2020 (ended Dec 31, 2019).

The Japanese auto giant posted earnings of $4.79 per ADR, up from the year-ago figure of $1.11. Moreover, the bottom line surpassed the Zacks Consensus Estimate of $3.84. The company recorded net income of ¥738 billion in the quarter under review, up 307.9% from the year-ago period.

Consolidated revenues decreased to ¥7.5 trillion ($69.4 billion), down 3.3% year over year. The top line also lagged the Zacks Consensus Estimate of $69.7 billion.

In the first nine months of fiscal 2020, consolidated vehicle sales improved to 6,830,129 units globally, marking an increase of 129,227 units from the same period of the last year.

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

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

The Automotive segment’s net revenues declined 3.7% year over year to ¥6.8 trillion ($62.5 billion) in third-quarter fiscal 2020. However, operating income increased 0.8% from the year-ago figure to ¥586 billion ($5.4 billion).

The Financial Services segment’s net revenues rose 0.2% to ¥553.4 billion ($5.09 billion) in the quarter under review. However, operating income decreased 12.1% year over year to ¥72.6 billion ($667.7 million).

All Other businesses’ net segmental revenues declined 3.1% to ¥378.9 billion ($3.5 billion) in third-quarter fiscal 2020. Moreover, operating income came in at ¥19.5 billion ($179 million), down 40.3% year over year.

Financial Position

Toyota had cash and cash equivalents of ¥3.7 trillion ($34 billion) as of Dec 31, 2019. Long-term debt amounted to ¥10.9 trillion ($100.2 billion). At the end of the first nine months of fiscal 2020, operating cash flow was ¥2.8 trillion ($25.7 billion), up 0.7% year over year.

Fiscal 2020 Guidance

For fiscal 2020, Toyota forecast of consolidated vehicle sales of 8.95 million units remains unchanged. The company expects consolidated net revenues, operating income and net income to be ¥29.5 trillion, ¥2.5 trillion and ¥2.35 trillion, respectively.

Zacks Rank & Stocks to Consider

Toyota currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector are Gentherm Inc THRM, Gentex Corporation GNTX and SPX Corporation SPXC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Gentherm has a projected earnings growth rate of 20.8% for the ongoing year. Its shares have gained 17.1% over the past year.

Gentex Corporation has an estimated earnings growth rate of 6.02% for 2020. The company’s shares have appreciated 48.9% in a year’s time.

SPX has an expected earnings growth rate of 8.09% for the current year. The stock has rallied 67% in the past year.

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