Toyota's projected op earnings bigger than GM's market cap

Posted by: Ian Rowley on November 7, 2007

Wednesdays’s contrasting results announcements once again highlighted the huge earnings gulf between Toyota and GM. For the six months through September, Toyota’s operating earnings rose 16.3% to $11.2 billion, while GM posted a huge $39 billion loss.

But perhaps even more disturbing is that after stock falls at GM, and an upward revison to Toyota’s earnings, the Japanese company’s expected operating profits for this year are now greater than GM’s market cap.

At yesterday’s results announcement in Tokyo, finance chief Takeshi Suzuki said that Toyota now expects to make operating profits of $20.2 billion this financial year, $440 million higher than earlier stated and a figure still considered conservative by analysts. By the end of Wednesday trading, which saw GM’s stock price plunge 6% to $33.95, the market valued the world’s biggest automaker at just $19.21 billion.

Reader Comments

Brandon W

November 8, 2007 9:31 AM

I know GM has its problems right now, but this suggests to me that their stock is badly undervalued. I'm historically not a fan of GM cars, but to say that the world's largest auto maker (they do still hold that title) isn't even worth as much as Toyota's profits is ridiculous.

Noz

November 9, 2007 8:16 PM

Brandon,

Ridiculous? What have you been smoking? If history is such a 'good judge', how about tracing that of GM over the past 20 years? Know the meaning of free-fall? And the reasons behind this kind of shameful performance?

The stats will show quite nicely that even the largely brain-dead 'America-firsters' have seen the light and abandoned GM and Ford. Forget Chrysler for the moment, if not forever.

It is as if GM has gone out of its way to poison its own pond with gas-swilling trucks and rental fleet quality cars. And this shows some kind of leadership regardless of what the word is preceded by?

I see the stock as badly over-priced, not the other way around. bought and paid for by GM's so-called/self-described superior management. Mass resignations are my recommendation, even considering the massive Golden Parachutes the Corner Office Clowns come with.

Noz

November 10, 2007 9:36 PM

As I said prior, but this was not included in Auto Beat Blog comments, GM is a loser, not a winner. There is a monu-mental philosophical problem there with strong/ill-equipped egos clashing with common sense. I might add there there is more than a dollop of naked greed involved too. Wagoner is very clearly a looser, and a very wealthy one at that. Then comes Lutz and his long list of failures, exercises in design, certainly not practicality. With this kind of management, the basement is where the elevator stops.

Out of all the wheels GM is building of late, the CTS is sub- Infinity G-35, the Malibu remains sub-Camry and sub-HONDA Accord as well, and the Buick SUV is little more than a Tiger Woods-style golf-course rover. Not for off pavement, but high on style and as yet unproven in terms of reliability.

Noz

November 22, 2007 8:00 PM

Let me add just one more thing to the subject of 'earnings wars'. As our buck shrinks in value in comparison to other currencies, our goods are cheaper to buy overseas and imports cost more here. The yen, around ¥119/$ a few months back, is now closer to ¥108/$. This is a substantial 'hit' for many in the exporting to the US business, a matter of which currency they are working with for pricing.

It is doubtful that this will aid our vehicular exports since we make no 'world-class' cars or trucks. We often don't even bother to meet RHD specs, for ONE. On the other hand, it is doubtful that the cost of 'imports' will increase, at least immediately. It is viewed as better to 'eat' the losses for the time being. This simply cuts into the profits which are still plenty positive--in sharp contrast to the continuing losses of the 'domestics'. Ain't GREED grand?

Kevo

February 2, 2008 8:38 PM

As a provider of roadside breakdown assistance, here in Australia ( our home grown brand, but largely based on GM US bits, is Holden ) my dealings with cars from all over the world in their worst moments ie brokendown on/in the middle of the road, I can hands down say the best cars in terms of sheer reliability are the Japanese brands with other Asian makers rapidly gaining ground.

I have, with my experience, switched my family fleet from local ( GM or Ford ) products to Jap cars and urge friends or anyone to buy Jap if you don't want to be stranded. People are waking up to Jap quality, Toyota are best quality car maker. Go Toyota, they deserve the rewards they earn for giving the customer what the customer needs, that is quality and reliability.

Ryan-Stock Market Prices for General Motors Corporation

March 12, 2009 9:26 AM

Right now GM is going through a bad phase but that does not indicate that they are finished.I am unbiased in this respect.Toyata's growth rate is going upwards and for GM is going in opposite direction.But theirstock price is badly undervalued.They were the best for the 70-75 years.They will come back.Now Toyata is no.1 in the automarket but GM is coming hard at Toyata.
Good Luck GM.

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