3 Auto Stocks Going Places: Toyota’s Surging Profit, Honda’s Chinese Sale Spike, Tesla’s Solid Quarter
Toyota Motor Corp. (NYSE:TM): Toyota’s net profit saw a surge of 70 percent to 438.4 billion yen ($4.4 billion), helped considerably by the weaker yen and cost reductions; the consensus called for 451.69 billion yen. Revenues saw gains of 16.2 percent to 6.28 trillion, with U.S. volume picking up 12.2 percent to 589,390 vehicles riding on the strong performance of the redesigned Corolla and Lexus IS. Toyota’s numbers easily trounced industrywide growth, which fell at 8.9 percent.
Honda Motor Co. (NYSE:HMC): Honda was able to spark a 212 percent gain in sales in China over October 2012, moving 75,000 vehicles in the country last month. The results signal the demand for Honda’s cars is returning, as anti-Japanese sentiment subsides after a territory dispute between China and Japan spurred a significant drop and negative attitudes toward Japanese products lessened. As for the year to date, Honda’s sales in China are up 15.8 percent, to 494,108 units.
Tesla Motors (NASDAQ:TSLA): Tesla shares are trading down some 10 percent despite reporting a third quarter that saw earnings of 12 cents per share beat by 1 cent and revenue of $603 million beat by $68 million. Further, Tesla reports that its gross margin was 22 percent in the period, nearing its goal of a 25 percent margin by the end of the year; Tesla delivered 5,500 Model S sedans, ahead of its own guidance, though it fell short of some high-flying estimates. The big takeaway from the conference call is that it will be production volume constraints — not demand constraints — that will pose the biggest issues in 2014.
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