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The Zacks Analyst Blog Highlights: Toyota Motor, General Motors, Volkswagen, Honda Motor and Mattel

TM GM VLKAY HMC MAT

 ZacksTrade Now

For Immediate Release

Chicago, IL – January 31, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Toyota Motor Corp. (TM - Analyst Report), General Motors Company (GM - Analyst Report), Volkswagen AG (VLKAY), Honda Motor Co. (HMC - Analyst Report) and Mattel, Inc. (MAT - Analyst Report).

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Here are highlights from Wednesday’s Analyst Blog:

Toyota Regains Sales Crown

 

Toyota Motor Corp. (TM - Analyst Report) recaptured the sales crown from General Motors Company (GM - Analyst Report) by selling 9.75 million vehicles globally in 2012, which exceeded GM’s sales of 9.29 million vehicles. Germany’s Volkswagen AG (VLKAY) came third with sales of 9.07 million vehicles for the year.

Toyota’s global vehicle sales rose 23% in 2012, while overseas sales improved 19%. Surprisingly, sales in the company’s domestic market surged 35% despite its sluggish economy. Sales of the company’s domestic rival Honda Motor Co. (HMC - Analyst Report) grew 19% to 3.82 million vehicles in the year.

Toyota’s victory can be attributed to its impressive product lineups and marketing initiatives. The automaker lost its No.1 position to GM in 2011 after gaining the title from GM in 2008. The loss of the crown was driven by its declining reputation due to a series of safety recalls as well as a negative impact from natural disasters in Japan and Thailand in 2011.

However, Toyota vowed to regain the top position by increasing its dependence on the non-U.S. markets, especially the high growth emerging markets. In 2012, the company reported an impressive 26.6% jump in sales to 2.08 million vehicles in the U.S. driven by strong sales across its lineups as it recouped the dealer lots with new vehicles.

Toyota plans to sell 9.91 million vehicles globally  this year, reflecting an estimated rise of 1.6% from 2012. It aims to generate 50% of global sales from the emerging markets by 2015, up from 45% presently. These would also help the automaker face burgeoning automakers in the markets such as Korea’s Hyundai Motor apart from Volkswagen.

Toyota, a Zacks Rank #3 (Hold) stock, saw more than a threefold increase in profits to ¥257.92 billion ($3.28 billion) or ¥81.44 ($1.04) per share in the second quarter of fiscal year ended September 30, 2012 from ¥80.42 billion or ¥25.65 in the same quarter of prior fiscal year.

The increase in profits can be attributed to strong demand for Toyota vehicles as well as positive impact from the company’s cost control measures. However, profits were lower than the Zacks Consensus Estimate of $1.62 per share.

Revenues in the quarter grew 18.2% to ¥5.41 trillion ($68.75 billion) on a 14.9% rise in sales volume to 2.16 million units. Vehicle sales increased in all the regions, except Europe. Operating income more than quadrupled to ¥340.61 billion ($4.33 billion) from ¥75.39 billion in the second quarter of previous fiscal year.

However, Toyota projected lower consolidated vehicles sales of 8.75 million units for fiscal 2013 ending March 31, 2013, down 50 thousand units from the prior guidance. The automaker also lowered its consolidated revenues outlook to ¥21.30 trillion (up 14.6% from fiscal 2012) from the prior guidance of ¥22.00 trillion. The downward revision of sales outlook was based on difficulties in Chinese and European markets.

 

Mattel Likely to Beat

The world’s largest manufacturer of toys, Mattel, Inc. (MAT - Analyst Report) is expected to beat expectations when it reports fourth quarter and full year 2012 results on Feb 1, 2013, before the opening bell.

Why a Likely Positive Surprise?

Our proven model shows that Mattel is likely to beat earnings as it has the appropriate combination of two key ingredients:

Positive Zacks ESP: Earnings ESP (Read: Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is at +3.51%. This is a meaningful and leading indicator for a likely positive earnings surprise for shares.

Zacks Rank #3 (Hold): Mattel currently retains a Zacks Rank #3 (Hold) which increases the predictive power of its ESP.

The combination of the stock’s Zacks Rank #3 (Hold) and +3.51% Earnings ESP makes us confident of a positive earnings surprise in the to-be-reported quarter.

Stocks with Zacks Ranks of #1, #2 and #3 have significantly higher chances of beating the earnings.

What is Driving the Better Than Expected Earnings?

Mattel remains the market leader in the global toy industry with its diverse portfolio of mature as well as high-growth brands and is comfortably positioned to benefit from any positive trend in the industry.

After relatively weak performances in the first quarter, the company has been performing favorably during the past two successive quarters and has delivered an average earnings surprise of 7.25% over the last four quarters.

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