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Will Toyota (TM) Disappoint Investors this Earnings Season?
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Toyota Motor Corporation (TM - Free Report) is set to report fourth-quarter and fiscal 2017 (ended Mar 31, 2017) results on May 10. In the previous quarter, the company had posted a positive earnings surprise of 36.45%. Let’s see how things are shaping up for this announcement.
Toyota expects consolidated revenues of ¥26.5 trillion ($247.7 billion) for fiscal 2017, down 6.7% from fiscal 2016. Operating income guidance stands at ¥1.85 trillion ($17.3 billion), which implies a 35.2% year-over-year decrease. Moreover, net earnings are expected around ¥1.7 trillion ($15.9 billion) in fiscal 2017, reflecting expectations of a 26.5% decrease over fiscal 2016.
The company’s weak projections reflect lower sales outside Japan. In fourth-quarter fiscal 2017, the company saw its exports decline 0.2% year over year, while full-year exports fell 2.4%. Toyota sales slid 0.1% year over year outside Japan in fiscal 2017.
While Toyota expects consolidated sales in fiscal 2017 to increase and growth in emerging markets, the company has been incurring huge expenses on recalls. Over the last few years, Toyota has been recalling vehicles in large numbers. Frequent recalls not only result in expenses but also affect the company’s reputation and lower vehicle resale value.
Further, Toyota has underperformed the Zacks categorized Automotive-Foreign industry over the last six months. Share price of the company has declined 3.44% during this period, while the industry has lost 2.50%.
Earnings Whispers
Our proven model does not conclusively show that Toyota is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP for Toyota is 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.90. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Toyota carries a Zacks Rank #4 (Sell) which further decreases the predictive power of ESP. We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Pan American Silver Corp. (PAAS - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #2. The company is scheduled to report first-quarter 2017 financial numbers on May 9.
Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #3. The company’s first quarter 2017 financial results are scheduled to release on May 9.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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Will Toyota (TM) Disappoint Investors this Earnings Season?
Toyota Motor Corporation (TM - Free Report) is set to report fourth-quarter and fiscal 2017 (ended Mar 31, 2017) results on May 10. In the previous quarter, the company had posted a positive earnings surprise of 36.45%. Let’s see how things are shaping up for this announcement.
Toyota Motor Corp Ltd Ord Price and EPS Surprise
Toyota Motor Corp Ltd Ord Price and EPS Surprise | Toyota Motor Corp Ltd Ord Quote
Factors Influencing this Quarter
Toyota expects consolidated revenues of ¥26.5 trillion ($247.7 billion) for fiscal 2017, down 6.7% from fiscal 2016. Operating income guidance stands at ¥1.85 trillion ($17.3 billion), which implies a 35.2% year-over-year decrease. Moreover, net earnings are expected around ¥1.7 trillion ($15.9 billion) in fiscal 2017, reflecting expectations of a 26.5% decrease over fiscal 2016.
The company’s weak projections reflect lower sales outside Japan. In fourth-quarter fiscal 2017, the company saw its exports decline 0.2% year over year, while full-year exports fell 2.4%. Toyota sales slid 0.1% year over year outside Japan in fiscal 2017.
While Toyota expects consolidated sales in fiscal 2017 to increase and growth in emerging markets, the company has been incurring huge expenses on recalls. Over the last few years, Toyota has been recalling vehicles in large numbers. Frequent recalls not only result in expenses but also affect the company’s reputation and lower vehicle resale value.
Further, Toyota has underperformed the Zacks categorized Automotive-Foreign industry over the last six months. Share price of the company has declined 3.44% during this period, while the industry has lost 2.50%.
Earnings Whispers
Our proven model does not conclusively show that Toyota is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP for Toyota is 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.90. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Toyota carries a Zacks Rank #4 (Sell) which further decreases the predictive power of ESP. We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
BioAmber Inc. has an Earnings ESP of +15.39% and a Zacks Rank #3. The company is slated to report first-quarter 2017 results on May 9. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pan American Silver Corp. (PAAS - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #2. The company is scheduled to report first-quarter 2017 financial numbers on May 9.
Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #3. The company’s first quarter 2017 financial results are scheduled to release on May 9.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>