Toyota Motor Corp. is expected to report a 52-percent surge in net profit in the quarter ended June 30, 2013, to JPY441.2 billion ($4.5 billion), according to the average of four analyst estimates compiled by Bloomberg. The profit surge at Toyota comes even after Detroit 3 continues to eat the Japanese carmaker’s market share in the United States.
It is mainly attributable to the effects of depreciated yen that allows Japanese companies to boost the value of their exported products. The yen has been depreciating since Shinzo Abe was installed as Japan’s Prime Minister in late 2012. The carmaker – which had struggled through a recall crisis, natural disasters and strong yen -- is expecting to post its highest annual profit in six years for the year ending March 31, 2014.
Edwin Merner, president of Atlantis Investment Research Corp. told Bloomberg that Toyota is “doing the right things” in not trying to increase its market share, but in trying to hike its profit margins.
He said that if Toyota’s volumes fell sharply to around 20 to 30 percent, he would “worry." Toyota shares so far have outperformed stocks of all major carmakers as it soared 55 percent in 2013, bring its market value up by over $77 billion.
Toyota’s stock is trading at around 10 times projected profits for next year, the highest multiple among the five biggest carmakers in the world. The carmaker’s posted a net profit margin of 4.4 percent in the fiscal year ended March 31, 2013, compared to just 1.5 percent in the a year ended March 31, 2012.