Toyota Motor Corporation (TM) recorded earnings of ¥170.54 per share ($3.28 per ADR) in second-quarter fiscal 2015 (ended Sep 30, 2014), beating ¥138.26 per share ($2.79 per ADR) in second-quarter fiscal 2014 (ended Sep 30, 2013). Earnings per ADR surpassed the Zacks Consensus Estimate of $3.14. The Japanese automaker posted consolidated net income of ¥539.1 billion ($5.18 billion) for second-quarter fiscal 2015, improving from ¥438.4 billion ($4.43 billion) in the year-ago quarter.
Consolidated revenues in the quarter increased 4.3% year over year to ¥6.55 trillion ($63 billion). Revenues surpassed the Zacks Consensus Estimate of $59.33 billion.
Unit sales inched down 0.03% year over year to 2.24 million vehicles. Unit sales rose 12.4% to 684,696 vehicles in North America. However, sales declined 8.9% to 524,402 units in Japan, 3.6% to 206,736 units in Europe, 4% to 369,442 units in Asia and 0.4% to 449,961 units in other regions (Central and South America, Oceania, Africa and the Middle East).
Operating income increased to ¥659.2 billion ($6.34 billion) from ¥592.1 billion ($5.98 billion) a year ago.
Segment Results
The Automotive segment’s revenues rose 3.7% to ¥6.03 trillion ($58 billion) in the quarter while its operating income improved 10.8% to ¥553.5 billion ($5.32 billion).
The Financial Services segment’s revenues moved up 15% to ¥399.95 billion ($3.85 billion), while the operating income improved 5.2% to ¥86.3 billion ($829.8 million).
All Other businesses’ revenues rose 8.5% to ¥296.92 billion ($2.86 billion) and operating income increased 33.6% to ¥17.6 billion ($169.2 million).
Financial Position
Toyota had cash and cash equivalents of ¥2.31 trillion ($22.2 billion) as of Sep 30, 2014, compared with ¥2.04 trillion ($20.4 billion) as of Mar 31, 2014. Total debt amounted to ¥17.64 trillion ($169.6 billion) as of Sep 30, 2014 against ¥16.33 trillion ($163.3 billion) as of Mar 31, 2014.
In the first half of fiscal 2015, operating net cash flow fell to ¥1.65 trillion ($16 billion) from ¥1.97 trillion ($19.9 billion) recorded in the year-ago period.
Fiscal 2015 Guidance
Toyota raised its consolidated revenue guidance to ¥26.5 trillion ($254.8 billion) from the prior guidance of ¥25.7 trillion ($247.1 billion). The revenue guidance reflects a 3.1% improvement from fiscal 2014.
Operating income guidance was also raised to ¥2.5 trillion ($24 billion) from ¥2.3 trillion ($22.1 billion) on the basis of marketing and cost-reduction efforts, and change in foreign exchange rates assumption, partially offset by lower vehicle sales and higher fixed costs. The new guidance implies a 9.1% year-over-year increase.
Net earnings are expected to be around ¥2 trillion ($19.2 billion) or ¥630.37 per share ($12.12 per ADR), improving from the prior guidance of ¥1.78 trillion ($17.1 billion) or ¥561.54 per share ($10.80 per ADR). The net income guidance reflects expectations of a 9.7% improvement over fiscal 2014.
Consolidated vehicle sales for fiscal 2015 are expected to be about 9.05 million units, down from the prior guidance of 9.1 million units as well as 9.12 million vehicles sold in fiscal 2014.
Currently, Toyota carries a Zacks Rank #1 (Strong Buy). Investors interested in the same industry could also consider stocks like Gentex Corp. (GNTX), Accuride Corp. (ACW) and STRATTEC Security Corp. (STRT). All these stocks sport a Zacks Rank #1.
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