Toyota Motor Corp. (NYSE:TM) Earnings Preview

Tomorrow, Aug 4, Toyota Motor Corporation is set to report first-quarter fiscal 2016 results.

Toyota is poised to benefit from its operations in emerging markets like Asia. With different product introductions, the company is expanding its global sales.

The company recorded an increase in earnings, operating income and revenues in fiscal 2015. Also, it provided a favorable outlook for these financial metrics for the fiscal 2016. However, the past string of recalls has dented Toyota’s reputation, resulting in lower vehicle resale value. The automaker’s recalls in 2012 and 2013 were the largest number of vehicles recalled by any automaker in these years. The company is now under pressure because of the recall related to the faulty Takata airbag. All this will adversely affect the results of the company.

Moreover, Volkswagen has officially overtaken Toyota as the world’s largest automaker. The German auto giant sold 5.04 million vehicles in the first half of 2015, beating Toyota’s 5.02 million in the same time frame. Volkswagen’s success came after it captured the leadership in the world’s largest vehicle market, China.

For the first half of 2015, sales are seen up 6.7% from the same period a year ago while earnings are projected to have risen 7.9%. According to Saxo Bank, Toyota is a favourite among analysts; 24 of 31 have buy recommendations with a potential 12-month return of nearly 18% expected.
Toyota Motor Manufacturing Canada (TMMC) declared that it is spending $421 Million to launch the next generation Lexus RX 350 and 450h vehicles at its Cambridge, Ontario assembly plant. The Government of Canada and the Province of Ontario are supporting the investment with funding totaling $100 Million.

TMMC will introduce a range of new technologies to support the new RX 350 and 450h. In fact, several features and technologies will be introduced at TMMC for the first time globally; others for the first time in North America.