Toyota Motor Corporation (ADR) (TM): A Strong Outlook For The Coming Year

On the other hand, Toyota has struggled mightily in Asia’s (and the world’s) largest market, China. Sales have been down significantly in recent months as strong anti-Japanese sentiment among Chinese consumers has hit many Japanese firms’ Chinese efforts hard.

Europe has hit many automakers hard, but Toyota Motor Corporation (ADR) (NYSE:TM)’s presence in the region is relatively small, and it has largely escaped the need to restructure that has hit larger regional rivals. The company was actually able to post an 8.6 billion yen increase in operating income in the region, to 26.4 billion yen for the full year.

A strong outlook for the coming year
For the full year that will end next March 31, Toyota said that it expects a net profit of 1.32 trillion yen, or $14 billion, a 42% increase over the net result from this past year. And believe it or not, that’s conservative: Toyota’s forecast assumes 90 yen to the dollar and 120 yen to the euro, though it’s currently closer to 100 and 130, respectively.

What does that mean for the stock? Toyota shareholders have enjoyed a great ride lately, as improving sales and Japan’s exchange-rate moves have driven a big surge for the automaker’s stock. That surge could continue for a while longer: If exchange rates continue to be favorable for Toyota, and sales continue to be strong in the U.S. and Southeast Asia, the coming year could be a very good one for Japan’s auto giant.

The article Toyota Surges on Strong Earnings Report originally appeared on Fool.com and is written by John Rosevear.

Motley Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.

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