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Toyota (TM) Earnings Lag Estimates in Q4, Revenues Beat

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Toyota Motor Corporation’s (TM - Free Report) earnings were $2.89 per ADR in fourth-quarter fiscal 2019 (ended Mar 31, 2019). Earnings missed the Zacks Consensus Estimate of $3.91. This Japan-based automaker reported net income of ¥ 459.5 billion ($4.2 billion) in the quarter under review, down from ¥ 481 billion ($4.5 billion) in the year-ago period.

Toyota’s total net revenues rose to $70 billion (¥7.75 trillion) from the year-ago figure of $69 billion (¥7.58 trillion). The figure surpassed the Zacks Consensus Estimate of $69.9 billion.

In fiscal 2019, consolidated vehicle sales went up to 8,976,795 units, marking an increase of 12,401 units from the last fiscal year. The automaker witnessed a decline in vehicle sales across North America and Other regions (consisting of Central and South America, Oceania, Africa, and the Middle East). However, sales in Japan, Europe and Asia rose from the year-ago period.

Toyota Motor Corporation Price, Consensus and EPS Surprise

 

Fiscal 2019 Results

During the fiscal year, Toyota generated net revenues of ¥30.2 trillion ($272 billion) compared with ¥ 29.4 trillion ($265 billion) in fiscal 2018.

However, the company’s net income declined to ¥2 billion ($18 million) compared with the year-ago figure of ¥2.6 billion ($23.4 million).

Segmental Results

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

The Automotive segment’s net revenues rose to ¥ 6.9 trillion ($62.8 billion) in fourth-quarter fiscal 2019 from ¥6.8 trillion ($63 billion) in the prior-year quarter. Operating income decreased to ¥393 billion ($3.6 billion) from the year-ago figure of ¥530 billion ($4.9 billion).

The Financial Services segment’s net revenues rose to ¥550 billion ($5 billion) in the quarter under review from ¥507 billion ($4.7 billion) in the prior-year period. The segment’s operating income was ¥85 billion ($773.6 million), marking an increase from ¥58 billion ($538 million) recorded in the fourth quarter of fiscal 2018.

All Other businesses’ net revenues increased to ¥515 billion ($4.7 billion) in the quarter under review from ¥496 billion ($4.6 billion) in the prior year. Further, operating income increased to ¥51 billion ($461 million) from the year-ago figure of ¥40 billion ($365.7 million).

Financial Position

Toyota had cash and cash equivalents of ¥3.7 trillion ($33.3 billion) as of Mar 31, 2019, compared with ¥3.1 trillion ($28 billion) as of Mar 31, 2018. Long-term debt amounted to ¥10.6 trillion ($95.4 billion) at the end of fiscal 2019 compared with ¥10 trillion ($90 billion) as of Mar 31, 2018.

At the end of fiscal 2019, operating cash flow was ¥3.8 trillion ($34.2 billion) compared with ¥4.2 trillion ($37.8 billion) recorded in the prior year.

Dividend Announcement

On May 8, Toyota announced that its board approved a dividend payment of ¥120 per common share for the end of the current fiscal year. Including this and the interim dividend of ¥100, annual dividend paid during fiscal 2019 was ¥220 per share.

Also, the company announced repurchasing 50 million of its common shares for up to ¥300 billion.

Fiscal Guidance

For fiscal 2020, Toyota expects consolidated vehicle sale of 9 million units, almost similar to the last fiscal year. Further, it projects consolidated net revenues of ¥30 trillion ($273 billion), operating income of ¥2.55 trillion ($23.2 billion) and net income of ¥2.25 trillion ($20.5 billion).

Zacks Rank & Stocks to Consider

Toyota currently carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the broader auto sector are Gentex Corporation (GNTX - Free Report) , Oshkosh Corporation (OSK - Free Report) and Ford Motor Company (F - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Gentex has an expected long-term growth rate of 6%. The stock has gained 14.2% in the past three months.

Oshkosh has an expected long-term growth rate of 11.6%. The stock has gained 2.9% in the past three months.

Ford has an expected long-term growth rate of 8.1%. Over the past three months, shares of the company have gained 24.1%.

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