The Zacks Analyst Blog Highlights:ToyotaMotor, General Motors, Ford Motor,
HYUNDAI MOTOR and Volkswagen
CHICAGO, June 22, 2012
CHICAGO, June 22, 2012 /PRNewswire/ --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. (NYSE:TM),
General Motors Co. (NYSE:GM), Ford Motor Co. (NYSE:F), HYUNDAI MOTOR CO.
(OTC:HYMLF) and Volkswagen AG (OTC:VLKAY).
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from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Thursday's Analyst Blog:
Is Toyota Ready to Recover?
Toyota Motor Corp. (NYSE:TM) has decided to trim its production capacity in
Japan by 10% to 3.1 million units by 2014 in order to cut its domestic output.
However, the company debarred itself for downsizing its workforce in the
country as a part of the plan.
Last week, the automaker has pacified its shareholders by mentioning that it
has recovered from the effects of disastrous 2011 due to the earthquake in
Japan and severe floods in Thailand.
In the fiscal year ended March 31, 2012, the company posted a 30.5% decline in
profits to ¥283.56 billion ($3.7 billion) or ¥90.20 ($1.17) per share and a 2%
fall in consolidated revenues to ¥18.58 trillion ($241.59 billion) due to the
above-mentioned disasters and appreciating yen.
However, the company still faces some serious headwinds. Firstly, the issue of
strengthening yen still prevails. The Japanese daily Nikkei has already
indicated that Toyota's overall domestic capacity is expected to fall to about
3.6 million units in 2012 compared with 3.9 million units before the global
financial crisis in 2008. Toyota aims to maintain annual domestic production
at about 3 million vehicles, which is a 500,000 units decline from the current
Second are the looming power shortages in the country caused by the meltdowns
at Fukushima Daiichi nuclear power plant after the earthquake. Currently,
Japan's power generators are mainly run by imported gas and fuel as all the
nuclear reactors have been shut down for routine safety checks due to the
The utility has already asked Toyota to bring down the power consumption by
5%. So what led Toyota to make such an optimistic statement of recovery
despite the headwinds?
As far as resolving the issue of strong yen is concerned, the company has
decided to sell half of its targeted domestic production in Japan and export
the rest. The Japan Automobile Manufacturers Association has predicted a 19%
rise in vehicle demand to 5 million vehicles in 2012 in stark contrast to a
15% fall to 4.2 million vehicles in 2011.
Toyota intends to revive sales by launching new models and redesigning its
existing lineups. The company lost its No.1 position to General Motors Co.
(NYSE:GM) and Ford Motor Co. (NYSE:F) in terms of sales volumes in the U.S. As
a result, the company plans to increase its dependence on the non-U.S.
markets, especially the high growth emerging markets.
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 CO. (OTC:HYMLF) and
Germany's Volkswagen AG (OTC:VLKAY).
In this regard, we can recall the fiscal 2013 sales guidance provided during
its fiscal 2012 earnings release. The company has projected consolidated
vehicles sales to increase 1.35 million units to 8.70 million units in the
year. Consequently, the company expects higher consolidated revenues of ¥22.00
trillion, operating income of ¥1.00 trillion yen and profits of ¥760.0 billion
for the fiscal year compared with fiscal 2012.
Toyota has also taken steps to deal with the power crisis in Japan. It has
adopted several power saving measures including installation of LED lightings
and plans to boost power generation on its own.
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