PREVIEW:Toyota,Honda,Nissan's 2Q Pfts To Sag;May Cut Fiscal Year View
[2008-12-23 17:04:27]
Japan's top three car makers - Toyota Motor Corp. (7203.To), Honda Motor Co. (7267.TO) and Nissan Motor Co. (7201.TO) - will likely report steep profit declines for their fiscal second quarter which ended Sept. 30 amid sluggish sales in the U.S. and the stronger yen.
Analysts warn Toyota is most likely to cut its full year forecast when it reports its second-quarter results with the other two smaller rivals also expected to slash their outlooks eventually as auto demand even in booming markets like China started to slow amid the murky global economic outlook. That will add pressure on their profits on top of already faltering sales in the U.S. and Europe.
"We do not think guidance cuts in themselves will constitute a negative surprise for investors. We expect sector companies to paint a gloomy picture for the second half of the fiscal year to March 2009 and the fiscal year to March 2010," Kota Yuzawa, an analyst at Goldman Sachs, said.
COMPANIES TO WATCH: Toyota Motor Corp. (7203.TO) - (Nov. 6) Market Expectations: Toyota, Japan's biggest car maker, will likely report a net profit of between Y156 billion and Y240 billion for the three months ended September, down 47%-65% from a year earlier, according to a survey of four analysts by Thomson Reuters. Five analysts estimate an operating profit of Y187 billion-Y334 billion, down 44%-69% on year. Toyota said Friday that its global vehicle sales for the three months ended September fell 4% on year - the first drop on a quarterly basis in seven years.
Key Issues: Investors will be on the lookout for comments on how muchthe company will cut its operating profit for this fiscal year through March. Some analysts expect Toyota to slash its full year operating profit outlook to Y1.000 trillion-Y1.300 trillion from its current projection of Y1.600 trillion. Honda Motor Co. (7267.TO) - (Oct. 28) Market Expectations: Honda, Japan's second biggest car maker by sales volume, is likely to report a net profit of between Y120.00 billion and Y130.85 billion, down 37%-42% on year, according three analysts' estimates compiled by Thomson Reuters. Four analysts expect an operating profit of Y158.65 billion-Y170 billion, down 30%-45% on year.
In July, Honda predicted an operating profit of Y128.65 billion for the quarter.
Key Issues: Even if operating profit comes in better than the company's projections, the company may not be able torevise up its full-year forecast.
The dramatically deteriorating business climate including dwindling global auto demand and the current jump in the yen will likely make it hard for the company to lift its forecast, some analysts say.
Nissan Motor Co. (7201.TO) - (Oct. 31) Market Expectations: Nissan, Japan's third biggest car maker, likely posted a net profit of Y65.0 billion-Y77.0 billion, down 36%-46% on year, according to three analysts' estimates compiled by Thomson Reuters.Five analysts estimate an operating profit of Y110.00 billion-Y130.05 billion, down 41%-50% on year.
The company may keep its current full-year forecast. But it could at least indicate the risk that its full-year earnings could undershoot its outlook.
Key Issues: Any latest comments on the possibility of taking a stake in General Motors Corp.
-By Yoshio Takahashi, Dow Jones Newswires; 813-5255-2929; yoshio.takahashi@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=ho8PTXEg%2B5DfkckkGM%2BVJw%3D%3D. You can use this link on the day this article is published and the following day.
