Exchange: NYSE | Sector: Consumer Cyclical | Industry: Auto Manufacturers
Q4 2024
Published: Mar 31, 2024
Earnings Highlights
Revenue of $11,072.61B up 14.3% year-over-year
EPS of $74.02 increased by 82% from previous year
Gross margin of 20.3%
Net income of 997.69B
""Our commitment to hybrid technology positions us as a leader in the evolving automotive landscape, driving not just sales but also consumer loyalty."" - Hiromu Narita, CFO
Toyota Motor Corporation (TM) Q4 2024 Financial Results: Robust Recovery Amidst Challenges
Executive Summary
Toyota Motor Corporation reported a solid performance in Q4 2024, with a remarkable year-over-year increase in net income of 80.65%, totaling ÂĨ997.69 billion, showcasing the company's strong recovery from prior economic challenges. Despite a sequential decline in revenue of 8.04% to ÂĨ11.07 trillion, Toyota maintained healthy profitability margins, indicating resilience in its operational capabilities.
Key growth drivers included a strategic focus on hybrid and fuel-efficient vehicles, bolstered by favorable market conditions in multiple regions. However, management highlighted challenges relating to supply chain constraints and fluctuating demand dynamics, prompting a cautious outlook for the coming quarters. The company's robust balance sheet and strategic investments position it well for future growth, although investors should be mindful of emerging competitive pressures and economic headwinds.
Key Performance Indicators
Revenue
11,072.61B
QoQ: -8.04% | YoY:14.27%
Gross Profit
2,250.19B
20.30% margin
QoQ: -16.20% | YoY:43.80%
Operating Income
1,112.70B
QoQ: -33.81% | YoY:77.48%
Net Income
997.69B
QoQ: -26.52% | YoY:80.65%
EPS
74.02
QoQ: -26.44% | YoY:82.00%
Revenue Trend
Margin Analysis
Key Insights
**Gross Profit**: ÂĨ2.25 trillion, a year-over-year increase of 43.80% but down 16.20% sequentially, which can be attributed to rising raw material costs.
**Operating Income**: ÂĨ1.11 trillion, up 77.48% YoY, yet reflecting a sequential decrease of 33.81%.
**Net Income**: ÂĨ997.69 billion, with an 80.65% year-over-year growth but a notable 26.52% drop quarter-over-quarter.
**Gross Profit Margin**: 20.3%, indicating strong cost control despite a decrease from previous quartiles.
**Operating Margin**: 10.0% with a notable recovery compared to prior quarters.
Financial Highlights
### Revenue Performance
Toyota's Q4 2024 revenue reached ÂĨ11.07 trillion, down 8.04% from the previous quarter but reflecting a 14.27% increase year-over-year, primarily driven by higher vehicle sales and better product mix.
### Profitability
- Gross Profit: ÂĨ2.25 trillion, a year-over-year increase of 43.80% but down 16.20% sequentially, which can be attributed to rising raw material costs.
- Operating Income: ÂĨ1.11 trillion, up 77.48% YoY, yet reflecting a sequential decrease of 33.81%.
- Net Income: ÂĨ997.69 billion, with an 80.65% year-over-year growth but a notable 26.52% drop quarter-over-quarter.
### Margins
- Gross Profit Margin: 20.3%, indicating strong cost control despite a decrease from previous quartiles.
- Operating Margin: 10.0% with a notable recovery compared to prior quarters.
- Net Margin: 9.0%, maintaining a competitive edge in an evolving market.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
11,072.61B
14.27%
-8.04%
Gross Profit
2,250.19B
43.80%
-16.20%
Operating Income
1,112.70B
77.48%
-33.81%
Net Income
997.69B
80.65%
-26.52%
EPS
74.02
82.00%
-26.44%
Key Financial Ratios
currentRatio
1.19
grossProfitMargin
20.3%
operatingProfitMargin
10%
netProfitMargin
9.01%
returnOnAssets
1.11%
returnOnEquity
2.92%
debtEquityRatio
1.07
operatingCashFlowPerShare
$105.37
freeCashFlowPerShare
$-7.65
priceToBookRatio
1.43
priceEarningsRatio
12.29
Net Income vs. Revenue
Expense Breakdown
Management Commentary
### Strategic Vision
Management underscored a commitment to advancing electrification and sustainable manufacturing practices as pivotal to future growth. Key quote from CFO Hiromu Narita: "Our commitment to hybrid technology positions us as a leader in the evolving automotive landscape, driving not just sales but also consumer loyalty."
### Supply Chain and Production
Concerns regarding supply shortages were voiced during the call. CEO Akio Toyoda remarked: "While we are navigating supply chain complexities, our diversified manufacturing processes help mitigate risks of production disruptions."
### Market Dynamics
Management acknowledged fluctuating consumer demand influenced by economic conditions: "We remain cautious yet optimistic about the broader market environment and will continue to adapt our strategies accordingly."
"Our commitment to hybrid technology positions us as a leader in the evolving automotive landscape, driving not just sales but also consumer loyalty."
â Hiromu Narita, CFO
"While we are navigating supply chain complexities, our diversified manufacturing processes help mitigate risks of production disruptions."
â Akio Toyoda, CEO
Forward Guidance
Toyota's management has set a conservative tone for Q1 2025, expecting potential sales dips due to renewed supply chain pressures. However, they reaffirmed the commitment to ensuring operational efficiency and cost management. Growth in the hybrid segment remains a cornerstone of the strategy, with specific targets including a 10% increase in hybrid vehicle production. Investors should monitor consumer demand trends and global economic signals closely to assess Toyota's adaptability to shifting market conditions.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
TM Focus
20.30%
10.00%
2.92%
12.29%
NSANY
14.00%
2.57%
1.69%
11.20%
RACE
48.80%
24.50%
9.59%
47.10%
STLA
18.30%
10.10%
9.39%
2.12%
GM
7.70%
2.14%
3.27%
5.56%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Toyota's strong financial performance in Q4 2024, despite seasonal headwinds, reinforces its strategic positioning in the automotive market. The emphasis on hybrid technology and sustainability aligns with global trends toward greener transportation, potentially enhancing its market share. However, investors should remain vigilant about the risks posed by supply chain issues and evolving consumer preferences. Overall, Toyota remains a solid long-term investment, with a balanced approach to risk and opportunity.
Key Investment Factors
Growth Potential
Toyota's focus on hybrid and fuel-efficient vehicles provides growth momentum, leveraging its strong brand reputation and technology investments.
Profitability Risk
Key risks include supply chain vulnerabilities, increasing raw material costs, and competition from emerging EV manufacturers.
Financial Position
Toyota boasts a strong balance sheet with total assets of ÂĨ90.11 trillion and stockholders' equity of ÂĨ34.22 trillion, ensuring ample liquidity to support future investments.
SWOT Analysis
Strengths
Strong brand loyalty and extensive global market reach.
Innovative technology in hybrid and fuel-efficient vehicles.
Robust financial position with substantial cash reserves.
Weaknesses
Dependence on traditional vehicle sales amidst a shift to EVs.
Vulnerability to supply chain disruptions and raw material cost fluctuations.
Opportunities
Growing demand for electric and hybrid vehicles globally.
Expanding into emerging markets with increasing automotive needs.
Threats
Intensified competition from EV startups and established automakers.
Regulatory changes regarding emissions and fuel efficiency affecting operations.