Toyotas' profits are up

they estimate $13 billion in operating income for next FY, and they are usually conservative with their estimates.

 

I see 1 trillion yen which would be $12.6B at today's exchange rate. Toyota has not been conservative with income estimates. It has badly missed some, but not recognizing certain risks. The big risk looking forward is exchange rates and electricity rates in japan.

This is how one analyst put it

The Japanese government is pitching in with incentives this year, but the programs may die in 2013, leaving Toyota with too much Japanese capacity if they can not cut costs there.

 

uh, they are generally very cautious with their forward statements... which is why they were still most valuable manufacturer in the world even when they lost money. They definitively like to underpromise and overdeliver.

They beat their net income prediction by 41.8% since Feb 7th announcement.

Oh no, did I round 12.6 billion to 13? Oh my gosh, will you report me?

 

Hope the stock goes up.
Bought some at $120....$80 now, but I ditched it way before that.
Genius investor here.
Do have a few TM bonds to get interest.

 

I'm sorry, I looked at the chart, they have had many worse earning suprises. The last 2 quarters they have surprised on the upside, but looking back its a pretty bad story. They have missed their numbers 4 out of the last 5 years. I call that over promise and under deliver. Look out at the chart.

The valuation is a high multiple of earnings because the analysts like the turn around akio toyoda is executing. It is not because they over deliver. Operating margin is 4.5% of sales, much lower than the 7% of Nissan or 10% of hyundai, which means plenty of room to increase profits even without sales growth.

Look at Tesla, they missed there numbers last night coming in at a bigger than expected loss, but the stock is up over 10% because the tesla S is ahead of schedule and the Mercedes deal looks like it is higher than expected volume.

2 quarters of exceeding guidance doesn't make up for the past mistakes. The last 2 quraters have been good. The last quarter was especially profitable because of higher japanese sales based on the government incentives. This does put them at risk. I corrected you estimate because it was in dollars not yen. Toyota estimates in yen and has a great deal of yen exposure. If the yen gets weak they are more likely to hit their number, but it won't be as many dollars. If it gets stronger as I expect though, it may have to make some tough choices with regards to japanese production. That's what the blurb I posted was about.

Are you saying I should short TM bonds

 

Nope AG you are already too late, mine already down went from $1.04 to 1.00 wiping out my gain to date. I am hoping it goes back.