We're not out of the woods yet

Despite recent good economic news, Toyota Motor and other companies continue to ratchet down expectations.

By Jonathan Berr Dec 9, 2011 1:08PM
Investors buoyed by the recent spate of good economic news shouldn't be breathing easier just yet. There is still plenty of negative data to digest.

Toyota Motor (TM) slashed its earnings outlook this week, citing the disruption to production caused by the worst floods in Thailand in almost 70 years. The timing couldn't be worse for the Japanese company, which is fighting the surging popularity of Hyundai Motor and its affiliate Kia Motors. In November, Toyota posted a 6.7% gain in deliveries, its first monthly sales increase since April. Meanwhile, Hyundai's sales gained 29%, surpassing analysts' estimates.

Post continues below.
The floods in Thailand disrupted production of several Toyota models, including the Camry and Corolla, exacerbating problems caused by the tsunami and earthquake in Japan earlier this year. The automaker's net income will slump to 180 billion yen in the 12 months ending March 31, lower than an earlier forecast of 390 billion yen and below the 393 billion yen estimate of financial analysts. Toyota also slashed its forecast for revenue and production.

There was bad news at DuPont (DD) and Texas Instruments (TXN) as well.

"We are seeing slower growth in certain segments during the fourth quarter, driven by global economic uncertainty," DuPont CEO Ellen Kullman said in a press release. Not surprisingly, the Wilmington, Del. company is seeing weakness in its consumer electronics and construction-related businesses.

Earnings for 2011 are projected to be $3.87 to $3.95 per share, down 10 cents from a forecast issued in October. Nonetheless, these results will represent an increase of as much as 20% over 2010.  More details will be provided at next week's investor day meetings.

The story is similar at Texas Instruments. The Dallas company cited "broadly lower demand across a wide range of markets, customers and products, except for wireless applications processors." Fourth-quarter revenue is expected to be $3.19 billion to $3.33 billion, versus an earlier projection of $3.26 billion to $3.54 billion. That's below analysts' forecasts of $3.41 billion. Earnings are projected at 21 cents to 25 cents, down from an earlier forecast of 28 cents to 36 cents.

Jonathan Berr is a freelance financial journalist.  He does not own shares of any of the companies listed here.




 
Tags: DDTM
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
284
284 rated 2
461
461 rated 3
671
671 rated 4
628
628 rated 5
618
618 rated 6
615
615 rated 7
495
495 rated 8
347
347 rated 9
115
115 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
DYNDYNEGY Inc10
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.