Daily Brief: Toyota Proves Carmakers With Chip Stockpiles Are The Ones To Beat

Daily Brief: Toyota Proves Carmakers With Chip Stockpiles Are The Ones To Beat

about 3 years ago3 mins

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Toyota had plenty on its plate last quarter, sure, but the Japanese carmaker still reported expectation-beating quarterly profits on Wednesday.

What does this mean?

Toyota’s come through this pandemic with far fewer dents than most of its rivals, partly thanks to its strength in markets that have coped relatively well with the coronavirus outbreak – namely those in Asia. And boy is it back swinging: the company announced last month it had regained the top spot as the world’s best-selling carmaker. Toyota’s now feeling so good about its future, in fact, that it decided to up its forecasts for its full-year profit by as much as 50%.

Toyota's quarterly operating profit
Source: The Wall Street Journal, Toyota

Why should I care?

The bigger picture: The chips are down – way, way down.

General Motors beat analysts’ expectations on Wednesday too, but the American carmaker warned that the microchip shortage could eat into its earnings by $2 billion this year. That’s not a unique concern among carmakers: many of them didn’t stock up while they had the chance, and now they’re faced with a rebound in car demand. And given that they can’t necessarily pay as much as cash-rich tech companies can, chipmakers are more likely to drop them to the bottom of the priority list. Not that this affects everyone equally, mind you: Toyota – like most Japanese carmakers – has a bigger-than-average inventory left over.

Multiyear high

For you personally: Here comes the next Tesla…?

You can’t talk cars without mentioning electric vehicles (EVs) in the same breath these days. So here’s one of the highest-profile EV startups you might be able to invest in soon: Rivian – which is aiming to put its electric pick-up truck and SUV into production this year – is reportedly thinking about listing on the stock market as soon as September, in what could be one of the biggest IPOs of the year. Better watch your back, Tesla

Keep reading for our next story...

Heineken Announced Worse-Than-Expected Earnings

Heineken image

Heineken’s struggling to keep a lid on its emotions like the rest of us: the world’s second-biggest brewer announced worse-than-expected earnings on Wednesday.

What does this mean?

With big nights out having turned into small nights in, Heineken sold less beer and made less profit than analysts were expecting last quarter. So it’s arguably no surprise that the company is looking to get back to pre-pandemic levels by cutting $2.5 billion in costs over the next two years – a plan that involves laying off nearly 10% of its global workforce. But even with that restructure in place, the profit margin it’s targeting by 2023 still fell short of analysts’ expectations – which might explain why investors sent its shares down 5%.

Heineken stock

Why should I care?

The bigger picture: Carlsberg’s ready to serve.

Carlsberg’s likewise been struggling to shift its beer, but more effective cost management saw the third-biggest brewer report better than expected profits. It’s feeling pretty optimistic about the future too, confident that it’s only a matter of time before people are buying liquor in their droves now the vaccine rollout’s underway. And this might not just be some summertime spike: Carlsberg reckons the bars and brewers that survive the pandemic could see a post-Prohibition-esque surge in demand once lockdowns lift.

Zooming out: Coke’s nailed this cost-cutting thing.

Coca-Cola posted its own better-than-expected earnings on Wednesday, even as the number of drinks it sold fell. See, when demand for its products plummeted last year, it cut jobs and sold off parts of its brands in hopes it’d come out of the pandemic relatively unscathed. And the move seems to have worked: the company’s cuts offset the drop-offs in sales and drove profit higher than analysts had forecast.

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