Toyota Reports Strong Fiscal Q3 Earnings, Beating Expectations
Toyota Motor, the world’s largest car maker, has reported an operating profit of $11.3 billion for its fiscal third quarter, surpassing Wall Street expectations of $9.2 billion. The company’s U.S.-listed shares surged 10.8%, reaching a record high of $224.46. While Toyota’s vehicle mix has changed at a slower pace compared to American rivals Ford Motor and General Motors, the company expects to sell around 120,000 battery plug-ins in the fiscal year, an increase from the 38,000 sold the previous year. Toyota’s success offers investors hope in an industry that is transitioning towards electrified vehicles.
Ford and GM Investors Struggle as Car Sales Rise
While Toyota enjoys a surge in profits, Ford and General Motors investors have encountered some challenges. Despite an 11% rise in U.S. car sales in 2023, Ford shares have remained flat over the past year, while GM’s shares fell by 7%. Both automakers have shifted their focus towards battery electric vehicles (EVs), leaving behind internal-combustion vehicles, whether hybrid or conventional. GM’s 2024 guidance exceeded expectations with a projected $13 billion in operating profit, compared to a consensus of $11 billion. Meanwhile, Ford expects to earn approximately $11 billion in 2024, up from $10.4 billion in 2023. Toyota’s success serves as a reminder that profitability is achievable during the transition to EVs.
Market Highlights: Congressional Action, Merger Announcements, and Corporate Earnings
Last week, Congressional action on border, Ukraine, and Israel aid collapsed following the withdrawal of Republican support for their own bills. China witnessed an increase in deflation as state funds began buying stocks. U.S. indexes opened mixed but ultimately rose thanks to positive earnings reports. The S&P 500 broke the 5000 mark for the first time, while Japan’s Nikkei reached a 34-year high. In company news, New York Community Bancorp’s shares plummeted after Moody’s downgraded its debt to junk. Boeing faced issues with improperly drilled holes in new MAX jets, and a report revealed that a door blown off on January 5 was missing four bolts. Meanwhile, Fox, Walt Disney’s ESPN, and Warner Bros. Discovery announced a merger of their sports streaming services.
Major Deals: Yandex Parent Company Sold, Novo Nordisk’s Acquisition, and Failed Woodside Energy and Santos Talks
In significant business deals, the Dutch-based parent company of Russia’s most popular search engine, Yandex, was sold for $5.2 billion, marking the largest sale of Russian assets since the Ukraine war began. Novo Nordisk’s controlling shareholder, Novo Holdings, agreed to purchase drug manufacturer Catalent for $16.5 billion, with Novo Holdings selling three Catalent manufacturing sites to Novo Nordisk to meet the growing demand for weight-loss drugs. Lastly, discussions between Australia’s Woodside Energy Group and Santos regarding a possible $57 billion deal have come to an end.
Key Economic Events to Watch Next Week
Next week, investors should pay attention to several key economic events. On Tuesday, the Bureau of Labor Statistics will release the consumer price index for January, which is expected to rise 2.9% year over year. Additionally, companies such as Coca-Cola, Cisco Systems, Applied Materials, and Deere will announce their earnings. On Thursday, the Census Bureau will report retail sales data for January, with economists forecasting a 0.2% month-over-month decline. Finally, on Friday, the University of Michigan will release its Consumer Sentiment Survey for February, with expectations for a reading of 79, the same as December’s figure.
Analyst comment
Positive news: Toyota Reports Strong Fiscal Q3 Earnings, Beating Expectations
Analyst opinion: Toyota’s strong earnings and increased focus on battery plug-ins indicate potential growth in the market for electrified vehicles, offering investors hope in the industry.
Negative news: Ford and GM Investors Struggle as Car Sales Rise
Analyst opinion: Despite the rise in car sales, Ford and GM face challenges as their shares remain flat or decrease. Transitioning towards EVs may be impacting investor confidence.
Neutral news: Market Highlights: Congressional Action, Merger Announcements, and Corporate Earnings
No direct market analysis or prediction provided in the news.
Neutral news: Major Deals: Yandex Parent Company Sold, Novo Nordisk’s Acquisition, and Failed Woodside Energy and Santos Talks
No direct market analysis or prediction provided in the news.
Neutral news: Key Economic Events to Watch Next Week
No direct market analysis or prediction provided in the news.
