Toyota Shares Decline 5% Since Q3 Earnings Beat Estimates

Core Insights - Toyota's shares have decreased by 5.3% following the release of its third-quarter fiscal 2025 results, which showed an earnings per share (EPS) of $9.98, significantly exceeding the Zacks Consensus Estimate of$4.36 and up from $6.81 in the previous year [1] - Consolidated revenues for the quarter were reported at$81.35 billion, surpassing the consensus estimate of $78.36 billion but down from$81.54 billion year-over-year [1] Financial Performance - The Automotive segment's net revenues increased by 1.7% year-over-year to ¥11.25 trillion ($73.8 billion), exceeding estimates of ¥10.71 trillion, while operating profit fell by 31.7$6.61 billion) but was above the estimate of ¥912.9 billion [3] - The Financial Services segment's net revenues rose by 10.9% year-over-year to ¥1.02 trillion ($6.71 billion), surpassing the forecast of ¥933.5 billion, with operating income at ¥163.7 billion ($1.07 billion), down 4.8% from the previous year but above the estimate of ¥120.1 billion [4] - All Other businesses reported net revenues of ¥393 billion ($2.58 billion), a 10$331.5 million), up 14.5% year-over-year and above the estimate of ¥34.4 billion [5] Future Guidance - For fiscal 2025, Toyota anticipates total retail vehicle sales of 10.85 million units, a decrease from 11.09 million units in fiscal 2024, with expected sales totaling ¥47 trillion compared to ¥45 trillion in fiscal 2024 [6] - Projected operating income for fiscal 2025 is ¥4.7 trillion, indicating a contraction of 12.2% year-over-year, while pretax profit is estimated at ¥6.18 trillion, down from ¥6.96 trillion in fiscal 2024 [6][7] - Research and development expenses are expected to rise to ¥1.3 trillion from ¥1.2 trillion, and capital expenditures are forecasted to increase to ¥2.15 trillion from ¥2.01 trillion [7] Market Position - Toyota currently holds a Zacks Rank of 4 (Sell), with better-ranked stocks in the automotive sector including Geely Automobile Holdings Limited (GELYY), Dana Incorporated (DAN), and Allison Transmission Holdings, Inc. (ALSN), with GELYY and DAN rated as 1 (Strong Buy) and ALSN rated as 2 (Buy) [8]