RPT-PREVIEW-Asia auto results seen looking up, eye on fx, demand
(This is a repeat of an earlier story ahead of HyundaiMotor's earnings release on Thursday)
* What: Toyota, Honda, Nissan, Hyundai July-Sept earnings
* When: Oct 22-Nov 5
* Top Japan automakers seen lifting forecasts
* Hyundai Q3 net seen more than doubling but won a worry
* End of govt sales incentives a risk next year (Repeats to fix link to TABLE, no changes to text)
TOKYO/SEOUL, Oct 21 (Reuters) - Top Japanese and Koreancarmakers are seen reporting improved quarterly earnings asgovernment incentives fuelled unforeseen demand, but sharpcurrency swings remain a risk for the big exporters.
For Toyota Motor Corp (7203.T), Honda Motor Co (7267.T) andNissan Motor Co (7201.T), July-September earnings will be farweaker than a year ago when the collapse of Lehman Brothersdeepened the global financial crisis. But results will mark a bigimprovement from the prior quarter when demand was weak andproduction was being cut, analysts said.
"With automakers aggressively cutting costs and auto demandin industrialised markets rebounding sharply thanks toincentives, we look for the recovery in automakers' profits toaccelerate in the second quarter," JPMorgan Securities analystKohei Takahashi wrote in a report.
Takahashi said that inventory shortages in some markets wouldlikely continue to drive production higher through the financialyear to March in Japan.
Japan's top three automakers have also already factored in afull-year dollar-yen rate in the low 90s, leaving room for upwardrevisions in their annual forecasts. The dollar fell to as low as88 yen JPY= earlier this month from above 97 yen in August, buthas since rebounded, helping improve earnings from the key U.S.market.
European and U.S. automakers are also seeing some signs ofimprovement after one of industry's worst ever periods drove bothGeneral Motors and Chrysler to bankruptcy.
TOYOTA LOSS LOOMS
Toyota is expected to be the only top Japanese automaker topost a quarterly loss as it struggles to reverse a big jump inproduction capacity it added when sales were booming before thecrisis hit.
Analysts expect the loss to disappear in the second half asproduction and sales improve.
"We regard yen appreciation as a risk, but expect Toyota'sresults announcement to be accompanied by an upward revision toguidance, and to confirm the groundwork is being laid for profitsin the second half and and earnings expansion next year," NomuraSecurities auto analyst Shotaro Noguchi said.
Toyota, the world's biggest automaker, has forecast anoperating loss of 750 billion yen ($8.3 billion) for the year toMarch, almost three times the average projection of a 269 billionyen loss in a survey of 20 analysts by Thomson Reuters I/B/E/S.
For the latest quarter, consensus estimates put Toyota'soperating loss at 63 billion yen, a far cry from the profit of169.5 billion yen a year ago but a vast improvement from the 195billion yen loss in the first quarter.
For an accompanying table double-click [ID:nSP304463]
Toyota has particularly benefited in Japan from thegovernment's generous incentives and tax breaks on hybrid cars,keeping its Prius sedan at the top of domestic sales rankingssince June.
Honda and Nissan are also seen faring better, with bothexpected to report second-quarter operating profits of more than30 billion yen, in Nissan's case, partly driven bybetter-than-anticipated growth in China.
The U.S. government's cash-for-clunkers scheme also helpedAsian automakers grab a bigger share of the world'ssecond-largest car market in the past quarter, although theeffect proved short-lived with sales slumping in September.
HYUNDAI BLAZES PAST
The biggest winner from the scrappage schemes, from theUnited States to Europe, has been South Korea's Hyundai Motor Co(005380.KS), which attracted customers with new models such asthe revamped Sonata mid-sized sedan, clever marketing tools andcompetitively priced cars compared with Japanese rivals.
South Korea's top automaker is expected to more than doubleits quarterly profit from the year before, when unionised workersstaged a strike and slammed the brakes on production.
Hyundai affiliate Kia Motors Corp (000270.KS) is also seenswinging to a net profit in the July-September third quarter onhigher sales fueled by new models.
But analysts cautioned that the rising won KRW= couldreduce their ability to offer attractive deals going forward andpotentially rein in sales growth further out.
"Hyundai is expected to keep outpacing rivals, especiallyJapanese makers," said Lee Sok-je, an analyst at Mirae AssetSecurities. "But I am really worried about the next year giventhe firmer won as well as the end of governments' (stimulus)measures."
The won gained 8.1 percent against the dollar in the threemonths ended Sept. 30, after an 8.6 percent jump in the previousquarter.
Hyundai is due to report third-quarter results on Thursday,followed by Honda on Oct 27, Nissan on Nov 4 and Toyota on Nov 5. ($1=90.64 Yen=1167.0 Won) (Editing by Lincoln Feast)
Source: Reuters
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