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Earlier today Toyota (NYSE:TM) announced significant upward revisions to its parent-only semi-annual forecast. The revisions are even more significant when compared on a year-over-year basis. In addition, Toyota provided future global sales targets, which barring an immediate General Motors (NYSE:GM) turnaround, would make Toyota the world's largest auto maker by sales in 2008 -- it already has a sizable market cap nearly 10x GM's.

Fiscal year 2007 semi-annual forecast revisions for Apr. 1, '06 - Sept. 30, '06 period (percent change vs. original forecast date: May 10, '06)

  • Net Revenues: 5.5 trillion yen ($46.6b), +5.8%, [+18% y-o-y]
  • Operating Income: 540 billion yen ($4.6b), +45.9%, [+81% y-o-y]
  • Ordinary Income: 740 billion yen ($6.3b), +32.1%, [+78% y-o-y]
  • Net Income: 500 billion yen ($4.2b), +31.6%, [+76% y-o-y]
*Note: The US$ figures are as of the time of writing and are reference only.

Reasons listed for revision:

"The forecast of Fiscal Year 2007 Semi-Annual is expected to increase from the previously announced forecast, due to a weaker yen than the initially anticipated exchange rate and an increase in sales in the overseas markets." (Toyota IR News Release)

Sales Outlook:

  • 2005: 8.13 million units (vs. 9.17 million units for GM)
  • 2006: 8.85 (expected)
  • 2007: n/a
  • 2008: 9.8 (forecast)
*Note: Includes contribution from equity stakes in Daihatsu Motor and Hino Motor.
  • Largest growth expected in Asia region: 2005 sales totaled approx. 1 million units vs. 2008 forecast sales of approx. 1.7 million units.
  • Target 10% operating margin via continued cost-cutting and more efficient factories. (Toyota president Katsuaki Watanabe)
  • Intends to hire 8,000 technical and engineering staff globally by 2010. Along with its global expansion, problems with recalls likely influenced this hiring decision.
    (Source: Reuters/CNNMoney.com)

See a summary of Toyota's Q1 earnings.

In its Q4 and full-year earnings release this past May, Toyota announced the following full-year consolidated financial forecast:

Toyota is announcing forecasts for consolidated financials for the first time ever. Net revenues for the current fiscal year ending next March are expected to increase by 6.0% to 22.3 trillion yen ($200b). Operating income is expected to grow by 1.2% to 1.9 trillion yen ($17b) and net income is forecasted to decrease by 4.5% to 1.31 trillion yen ($11.75b). The lower net income forecast is a result of an expected stronger yen in addition to the one time gains in the prior fiscal from Toyota's gain from its investment in UFJ Holdings which merged with Mitsubishi-Tokyo Financial Group. [Note: US$ figures are from the forex conversion rate on May 10th.]

The Jiji Press reports Toyota VP Kazuo Okamoto said Toyota plans to introduce a rechargeable (plug-in) battery hybrid auto around 2010.

In separate news, the situation in Thailand following the military coup has forced Toyota to suspend night production at its two plants. Toyota president Watanabe commented as follows:

"We have not decided as to when we can resume operations, and the production suspension there will have some impact on our sales."

Forbes XFN-Asia newswire reported the two plants have a combined annual capacity of 450,000 units.

Toyota's ordinary shares (Tokyo: 7203) came under pressure losing 0.80% to close at 6,230 yen ($105.62 ADR equivalent) as the overall market fell on news of the coup in Thailand and ahead of the Fed's rate setting decision meeting today. Toyota's ADRs are trading up about 0.70% intra-day at $107.14.

Toyota Motor Corp (TM) 1-year chart 09/20/06 intra-day:

Disclosure: I do not own shares of Toyota.

Source: Toyota Ups Guidance, Sets Global Production Targets