Toyota stock rises in pre-market hours for forward statements

After Toyota Motor Corporation (TMC) announced financial results for the nine months ending December 31, 2010, the stock rose in pre-market hours due to key forward-looking statements.

Any rise in pre-market hours, before New York’s official open, usually implies fundamental strength or shocking news.

15 minutes after the open in New York, the pre-market bullish tone was intact.

Since there is usually a cause for every effect, most notable time was TMC’s revision to its consolidated vehicle sales projections for the full fiscal year ending March 31, 2011. The number rose from 7.41 million to 7.48 million units, an increase of 70 thousand units from TMC’s forecast announced in November 2010.

According to the official TMC news release, on a consolidated basis, net revenues for the nine-month period totaled 14.351 trillion yen, an increase of 5.0 percent compared to the same period last fiscal year.

Operating income increased from 52.2 billion yen to 422.1 billion yen, while income before income taxes and equity in earnings of affiliated companies was 521.7 billion yen. Net income increased from 97.2 billion yen to 382.7 billion yen.

Operating income increased by 369.9 billion yen, mainly as a result of a large increase in vehicle sales in emerging markets and continued cost reduction including company-wide VA activities. Factors for the increase include 570.0 billion yen due to marketing efforts and 120.0 billion yen due to cost reduction efforts.

Consolidated vehicle sales for the nine months amounted to 5.517 million units, an increase of 322 thousand units compared to the same period last fiscal year.

Commenting on the forecasts for FY2011, TMC Senior Managing Director Takahiko Ijichi said: “In addition to an improving vehicle-sales outlook in Japan, Asia and Russia, the progress of our company-wide profit improvement activities, such as further reduction of variable costs and control over fixed costs, has exceeded our earlier expectations. As a result, we now expect to overcome the rapid and acute yen appreciation and achieve a substantial increase in operating income. One can therefore see that our earnings are firmly recovering.”

That was enough for yesterday’s close of 85.85 to be gapped upward to 86.25 at 8 a.m. only to be followed by rising prices to as high as 87.50 before settling to 87.00 at 9:15 a.m. EST.

From a chart perspective, TMC has shown support in the form of a double bottom in the 81.50 area.

Disclosure: Frank Sherosky, creator of the chart and author of "Awaken Your Speculator Mind" does not hold any stock or option positions in this stock at this time.

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About the Author: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks and writes articles, books and ebooks via authorfrank.com, but may be contacted here by email: [email protected]

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