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Toyota (TM) Q3 Operating Income Surges 54%, Revenues Rise

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Toyota Motor Corporation’s (TM - Free Report) operating income soared 54% to ¥673.6 billion ($5.96 billion) in third-quarter fiscal 2018 (ended Dec 31, 2017). Also, the Japanese automaker reported net income of ¥970.7 billion ($8.6 billion) in the quarter in comparison to ¥506.8 billion ($4.7 billion) in the prior-year quarter.

Net revenues increased 7.4% year over year to ¥7.61 trillion ($67.3 billion) in the quarter. The Zacks Consensus Estimate for revenue was $65.11 billion.

Segment Results

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

Toyota Motor Corp Ltd Ord Price, Consensus and EPS Surprise

 

The Automotive segment’s net revenues rose to ¥6.86 trillion ($60.7 billion) in the reported quarter in comparison to ¥6.45 trillion ($59.2 billion) in the year-ago quarter while operating income increased to ¥569 billion ($5.1 billion) from the year-ago figure of ¥382.7 billion ($3.5 billion).

The Financial Services segment’s net revenues rose to ¥512.5 billion ($4.5 billion) in the quarter under review as compared to ¥476 billion ($4.4 billion) in the prior-year period while operating income surged to ¥82.6 billion ($731 million) from the year-earlier figure of ¥42.6 billion ($390.8 million).

All Other businesses’ net segmental revenues rose to ¥381 billion ($3.37 billion) in the quarter under discussion compared with ¥276 billion ($2.5 billion) in the comparable period last year while operating income augmented to ¥24.7 billion ($218.6 million) from the year-ago tally of ¥16.5 billion ($151.4 million).

Financial Position

Toyota had cash and cash equivalents of ¥2.7 trillion ($23.9 billion) as of Dec 31, 2017 compared with ¥3 trillion ($26.3 billion) as of Mar 31, 2017. Long-term debt amounted to ¥10.5 trillion ($92.9 billion) as of Dec 31, 2017 compared with ¥9.9 trillion ($86.8 billion) as of Mar 31, 2017.

In the first nine months of fiscal 2018, operating net cash flow was ¥2.8 trillion ($25 billion) compared with ¥2.2 trillion ($20.6 billion), registered in the same period last year.

Fiscal 2018 Guidance

Toyota expects its total retail unit vehicle sales for fiscal 2018 at roughly 10.3 million units compared with the 10.25 million units recorded in fiscal 2017.

The company projects its net revenues at ¥29 trillion in comparison to its previous assumption of ¥28.5 trillion, thus reflecting a 5.1% gain over fiscal 2017. Also, it anticipates its operating income for fiscal 2018 at ¥2.2 trillion, a 10.3% increase from the previous year.

Zacks Rank & Key Picks

Toyota carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Peugeot SA , Lear Corporation (LEA - Free Report) and Genuine Parts Company (GPC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peugeot has an expected long-term growth rate of 16.6%. Shares of the company have climbed 2.6% in the last 30 days.

Lear Corp has an expected long-term growth rate of 7.1%. The stock has jumped 21.2% in the last six months.

Genuine Parts has an expected long-term growth rate of 7.2%. In the last six months, shares of the company have rallied 18.4%.

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