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Toyota Believes The Worst Is Behind It

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Toyota Believes The Worst Is Behind It

Toyota Motor Corporation (NYSE: TM) gave an optimistic prognosis when reporting its fourth-quarter results, believing the worst of the economic impact from the coronavirus pandemic was over and expecting that, at its biggest markets at least, sales could rebound even by the year-end.

The industry

Despite Toyota's optimism, the rest of the auto industry has a less confident vision of what the future holds.

Volkswagen AG (OTC: VWAGY) Chief Financial Officer Frank Witter said on April 29 that "no one has a clear visibility on the duration and severity of this crisis."

A majority of automakers seemingly share this sentiment, with many focusing their efforts to pile up cash and decrease spending to ensure they can survive a prolonged downturn.

Out of Detroit's big carmakers, General Motors Company (NYSE: GM) learned the hard way the damage a lack of capital can wreck from the 2008 downturn. Nevertheless, it and others, like Ford Motor Company (NYSE: F) and Fiat Chrysler N.V. (NYSE: FCAU), are gearing up to restart production in North American factories as soon as May 18th.

This trails Toyota and Honda Motor Co Ltd (NYSE: HMC), which have restarted production at some of their U.S. plants on May 11, trailing news of a sizable drop in sales through April for both companies at -54%.

Toyota's Q4 And Full-year Earnings

In its recently-announced Q4 earnings report, Toyota announced a quarterly net profit decline of 86% to $587 million for the January-March quarter. Although not stellar by any measure, it does stack up better than many of its competitors. The figure is double that of the $292 million net profit reported by GM for the same period, whereas Honda Motors reported a net loss of $274 million for the quarter on Tuesday and didn't provide any guidance due to uncertainty around when sales might rebound.

For the full fiscal year, Toyota clocked in a revenue of $278.5 billion. This is pretty much flat when compared to last year, although net profit did rise slightly to $19.3 billion. And as for the year ending in March 2021, Toyota expects both revenue and sales volume could fall around 20% in with nearly 80% drop in operating profit to $4.7 billion.

Although it might delay the introduction of new models to save on cash, research and development spending will be kept steady this year.

Outlook

While most other automakers are rightfully cautious of what the future may bring, tiptoeing around a turnaround schedule, Toyota's prognosis is among the sunniest offered by the group.

Still, the global car industry has been witnessing a slump for the past few quarters. It has only worsened as a result of the coronavirus outbreak.

Nevertheless, major markets are showing small signs of life. China is slowly reopening its economy, with an increasing number of dealerships operating. As U.S. factories prepare to restart production, carmakers may start the prolonged process of bouncing back.

But this year is far from done when it comes to challenges ahead. Nevertheless, Toyota has made quite a cushion to face them.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com

The post Toyota Believes the Worst Is Behind appeared first on IAM Newswire.

 

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Posted-In: automakers Covid-19 IAM NewswireEarnings News Guidance

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