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Toyota (TM) to Report Q2 Earnings: What Should Investors Expect?

Declining vehicle sales in Japan, Europe and China, partly offset by rising sales in the United States, likely to have impacted Toyota's (TM) fiscal second-quarter performance.

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This story originally appeared on Zacks

Toyota TM is set to release second-quarter fiscal 2022 results on Nov 4. The Zacks Consensus Estimate for earnings is pegged at $2.60 per share on revenues of $62.07 billion.

This Japanese auto giant delivered higher-than-anticipated earnings in the last reported quarter on better-than-expected revenues.  

Over the trailing four quarters, the company surpassed estimates on all occasions, the average surprise being 58.9%.

- Zacks

Toyota Motor Corporation Price and EPS Surprise

Toyota Motor Corporation Price and EPS Surprise

Toyota Motor Corporation price-eps-surprise | Toyota Motor Corporation Quote

Trend in Estimate Revisions   

The Zacks Consensus Estimate for Toyota’s fiscal second-quarter earnings per share has been revised downward by 56 cents to $2.60 in the past 30 days. This compares unfavorably with the year-ago quarter’s earnings of $3.15 per share, indicating a fall of 17.46%, year on year. Moreover, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year decline of 2.77%.

Earnings Whispers

Our proven Zacks model does not conclusively predict an earnings beat for Toyota this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. However, that is not the case here as elaborated below.

    

Earnings ESP: Toyota has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is at par with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Toyota, peers of which include Honda HMC and Nissan NSANY, currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Factors

Toyota’s fiscal second-quarter results will reflect the declining volumes in Japan, Europe and China, partly offset by the rising sales in the United States.

For the quarter in discussion, Toyota’s vehicle sales in the Japanese market summed 485,856 units, down from the 554,578 units sold in the prior-year quarter. This downside primarily resulted from the parts and supply shortage associated with the spread of COVID-19 in Southeast Asia. The total vehicle sales in Europe and China totaled 256,488 and 429,977 units, respectively, sliding from the 282,143 and 509,348 units sold in the prior-year period, amid the pandemic and chip crunch-related woes.

On a somewhat positive note, Toyota is likely to have benefited from the surge in vehicle sales in the United States, which is the second largest car market in the world. For the July-September quarter, Toyota was the bestselling automaker in the United States, beating the perennial market leader General Motors GM second time in a row. The Japanese automaker registered sales of 566,005 vehicles, up from the 558,450 vehicles sold in the prior-year quarter.

Meanwhile, the company’s elevated capital expenditure on advanced technologies and alternative fuels for the development of electric and autonomous vehicles might have limited the fiscal second-quarter margins to a certain extent.



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