Toyota Motor Corp.
) posted earnings per share of ¥177.32 ($1.79) in first-quarter
fiscal 2014 (ending Jun 30, 2013), reflecting a strong 93.4% year
over year rise. The company gained heavily from favorable
currency translation and strong cost-controlling measures.
Consolidated net income surged 87.8% year over year to ¥604
billion ($6.1 billion).
Consolidated revenues in the quarter escalated 13.7% year over
year to ¥6,255.3 billion ($63.2 billion) despite a 1.6% drop in
unit sales to 2.2 million units. Unit sales dropped 8.8% in
Japan, 7.8% in Europe and 5.7% in Asia. However, unit sales in
North America and Other markets rose 4% and 7%, respectively.
Operating income was ¥663.3 billion ($6.1 billion), up 87.9%
year over year.
The improvement in revenues and profits was attributable to
positive impacts from currency fluctuations of ¥260 billion ($2.6
billion), cost reduction activities of ¥70 billion ($707
million), marketing activities of ¥30 billion ($303 million) and
other activities of ¥10.2 billion ($103 million). These positives
aided the company to offset headwinds associated with rise in
expenses and others of ¥60 billion ($606 million).
segment revenues went up 13.6% to ¥5,818 billion ($58.8 billion)
in the quarter while operating income surged 135.2% to ¥608.4
billion ($6.1 billion). The increase in operating income was
mainly attributable to favorable currency fluctuation as well as
positive impact of cost reduction measures.
segment revenues scaled up 23.8% to ¥339.8 billion ($3.4
billion), while operating income plummeted 40.9% to ¥51.2 billion
($517 million). The decrease in operating income was primarily
due to valuation losses on interest rate swaps.
businesses revenues dropped 3.6% to ¥234.4 billion ($2.4 billion)
and operating income declined 23.5% to ¥7.1 billion ($71.7
Toyota had cash and cash equivalents of ¥1,526.2 billion
($18.25 billion) as of Jun 30, 2013, compared with ¥1,718.2
billion as on Mar 31, 2013 and ¥1,728.2 billion as on Jun 30,
2012. Operating net cash flow improved 46.5% year over year to
¥1029.3 billion ($10.4 billion). Long-term debt increased to
¥7,911.2 billion ($79.9 billion) as of Jun 30, 2013, from
¥7,337.8 billion as of Mar 31, 2013, reflecting a long-term
debt-to-capitalization ratio of 58.3%, compared with 57.4% as of
Mar 31, 2013.
Fiscal 2014 Guidance
Toyota raised its projections for fiscal 2014. Consolidated
revenues are now estimated at ¥24,000 billion (($240 billion), an
increase of 8.8% from fiscal 2013. Earlier, the company projected
revenues of ¥23,500 billion. Operating income is expected to rise
46.9% year over year to ¥1,940 billion ($19.5 billion). Net
earnings are expected to go up 53.8% to ¥1,480 billion ($14.8
billion), up from ¥1,370 billion expected earlier.
Toyotaplays a pivotal role in shaping the global automobile
industry. Its increased focus on hybrid offerings and
substantial recapturing of sales from top U.S. automakers like
General Motors Company
) and expanding business in emerging markets stand testimony to
its growing presence on the global map.
However, Toyotafaces challenging market conditions in the
Chinese and European markets. Furthermore, continued safety
recalls are hampering its brand image. Subdued macroeconomic
factors also remain detrimental factors for the business growth
Other stocks from the automobile sector such as
Nissan Motor Co. Ltd.
), both with Zacks Rank #1 (Strong Buy), are worth considering
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