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The Zacks Analyst Blog Highlights General Motors, Ford, PACCAR, O'Reilly Automotive and BorgWarner
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For Immediate Release
Chicago, IL – November 1, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: General Motors (GM - Free Report) , Ford (F - Free Report) , PACCAR (PCAR - Free Report) , O'Reilly Automotive (ORLY - Free Report) and BorgWarner (BWA - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Auto Stock Roundup: Q3 Earnings in Full Swing
Last week, the European Automobile Manufacturers Association released data for commercial car registrations for September and the first nine months of 2022. The European Union (EU) commercial vehicle market contracted 6.6% last month to 133,880 units, representing the 15th straight month of decline. Registrations in France, Italy and Germany dwindled 11%, 10.7% and 3.1%, respectively.
Meanwhile, Spain recorded a 0.1% increase in registrations. For the first three quarters of 2022, commercial vehicle registrations in the EU declined 17.6% to 1.2 million units. Registrations in all the major EU markets fell, with Spain witnessing the sharpest decline of 23%.
Meanwhile, a host of auto giants released third-quarter results last week. While US auto giant General Motors beat earnings estimates, its close peer Ford missed the same. Trucking giant PACCAR not just surpassed earnings estimates but the metric more than doubled year over year. Auto parts retailer O'Reilly Automotive and auto equipment provider BorgWarner delivered a comprehensive beat.
General Motors reported third-quarter 2022 adjusted earnings of $2.25 per share, surpassing the Zacks Consensus Estimate of $1.89. The bottom line surged 48% from the year-ago quarter's earnings of $1.52 per share. Revenues of $41,889 million beat the Zacks Consensus Estimate of $41,833.3 million. The top line soared 56.4% from the year-ago figure of $26,779 million.
For 2022, General Motors' full-year net income projection was reiterated in the range of $9.6-$11.2 billion. The adjusted EBIT forecast also remained unchanged in the range of $13.0 billion to $15.0 billion. The company continues to expect adjusted EPS in the band of $6.5-$7.5. The adjusted automotive free cash flow of $7 billion to $9 billion was also retained.
Ford reported adjusted earnings of 30 cents per share for third-quarter 2022, missing the Zacks Consensus Estimate of 31 cents. The bottom line declined 41.2% from the year-ago quarter's earnings of 51 cents. The company's consolidated third-quarter revenues came in at $39.4 billion, rising 10% year over year. Ford Automotive revenues were up 12% year over year to $37.2 billion but lagged the Zacks Consensus Estimate of $38.6 billion.
Ford's 2022 projections have been revised. Adjusted EBIT for 2022 is now estimated to be around $11.5 billion instead of the prior guided range of $11.5-$12.5 billion. Adjusted FCF is envisioned in the range of $9.5 billion-$10 billion for 2022, up from the prior range of $5.5-6.5 billion. The company envisions 10% growth in vehicle wholesale volumes for 2022. However, it anticipates headwinds from commodity prices and other inflationary costs to the tune of $9 billion for 2022.
PACCAR earnings of $2.21 per share for third-quarter 2022 beat the Zacks Consensus Estimate of $2.01 and rocketed 109% from the year-ago figure. Consolidated revenues (including trucks and financial services) came in at $7,059 billion, up from $5,146.8 million recorded in the corresponding quarter of 2021. Sales from Trucks, Parts and Others were $6,687 million, which marginally missed the consensus mark of $6,692 million.
PACCAR's cash and marketable debt securities amounted to $4,762.9 million as of Sep 30, 2022, compared with $4,813 million on Dec 31, 2021. Capex and R&D expenses for 2022 are envisioned in the band of $475-$500 million and $330-$340 million, respectively. For 2023, capital expenditure and R&D costs are projected to be between $525 million and $575 million and $350 million and $400 million, respectively.
O'Reilly reported third-quarter 2022 adjusted earnings per share of $9.17, beating the Zacks Consensus Estimate of $8.46. Comps grew 7.6% in the reported quarter and topped the Zacks Consensus Estimate of 4.79%. The bottom line increased 13.6% from $8.07 in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $3,799.6 million, crossing the consensus mark of $3,713 million. The top line was 9% higher than the prior-year figure of $3,479.5 million.
During the quarter, the company opened 38 new stores in the United States and one in Mexico. The total store count was 5,938 as of Sep 30, 2022.For 2022, ORLY's estimates have been revised. Total revenues are now expected within the range of $14.1-$14.3 billion compared with the prior guidance of $14-$14.3 billion. Earnings per share are pegged within $32.35-$32.85, up from $31.25-$31.75 estimated earlier.
BorgWarner reported adjusted earnings of $1.24 per share for third-quarter 2022, up from 80 cents recorded in the prior-year quarter. The bottom line also beat the Zacks Consensus Estimate of $1.02 per share. The automotive equipment supplier reported net sales of $4,060 million, outpacing the Zacks Consensus Estimate of $3,977 million. The top line also moved up 18.8% year over year.
For full-year 2022, the company anticipates net sales within $15.4-$15.7 billion, indicating year-over-year growth of 12-14%. Importantly, BorgWarner envisions electric vehicle revenues of around $850 million for 2022, doubling from 2021 levels. Adjusted operating margin is expected in the band of 10-12%. Adjusted net earnings are estimated to be within $4.25-$4.45 share. Free cash flow is projected in the band of $650-$750 million.
Industry watchers will keep a tab on U.S. vehicle sales data for October. Investors are also awaiting the quarterly releases of a host of auto companies that are slated to report this week.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights General Motors, Ford, PACCAR, O'Reilly Automotive and BorgWarner
For Immediate Release
Chicago, IL – November 1, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: General Motors (GM - Free Report) , Ford (F - Free Report) , PACCAR (PCAR - Free Report) , O'Reilly Automotive (ORLY - Free Report) and BorgWarner (BWA - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Auto Stock Roundup: Q3 Earnings in Full Swing
Last week, the European Automobile Manufacturers Association released data for commercial car registrations for September and the first nine months of 2022. The European Union (EU) commercial vehicle market contracted 6.6% last month to 133,880 units, representing the 15th straight month of decline. Registrations in France, Italy and Germany dwindled 11%, 10.7% and 3.1%, respectively.
Meanwhile, Spain recorded a 0.1% increase in registrations. For the first three quarters of 2022, commercial vehicle registrations in the EU declined 17.6% to 1.2 million units. Registrations in all the major EU markets fell, with Spain witnessing the sharpest decline of 23%.
Meanwhile, a host of auto giants released third-quarter results last week. While US auto giant General Motors beat earnings estimates, its close peer Ford missed the same. Trucking giant PACCAR not just surpassed earnings estimates but the metric more than doubled year over year. Auto parts retailer O'Reilly Automotive and auto equipment provider BorgWarner delivered a comprehensive beat.
While PCAR and ORLY hold a Zacks Rank #2 (Buy), F, GM and BWA carry a Zacks Rank #3 (Hold) each. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Highlights of the Quarterly Releases
General Motors reported third-quarter 2022 adjusted earnings of $2.25 per share, surpassing the Zacks Consensus Estimate of $1.89. The bottom line surged 48% from the year-ago quarter's earnings of $1.52 per share. Revenues of $41,889 million beat the Zacks Consensus Estimate of $41,833.3 million. The top line soared 56.4% from the year-ago figure of $26,779 million.
For 2022, General Motors' full-year net income projection was reiterated in the range of $9.6-$11.2 billion. The adjusted EBIT forecast also remained unchanged in the range of $13.0 billion to $15.0 billion. The company continues to expect adjusted EPS in the band of $6.5-$7.5. The adjusted automotive free cash flow of $7 billion to $9 billion was also retained.
(General Motors Q3 Earnings Beat Estimates, Sales Rise Y/Y)
Ford reported adjusted earnings of 30 cents per share for third-quarter 2022, missing the Zacks Consensus Estimate of 31 cents. The bottom line declined 41.2% from the year-ago quarter's earnings of 51 cents. The company's consolidated third-quarter revenues came in at $39.4 billion, rising 10% year over year. Ford Automotive revenues were up 12% year over year to $37.2 billion but lagged the Zacks Consensus Estimate of $38.6 billion.
Ford's 2022 projections have been revised. Adjusted EBIT for 2022 is now estimated to be around $11.5 billion instead of the prior guided range of $11.5-$12.5 billion. Adjusted FCF is envisioned in the range of $9.5 billion-$10 billion for 2022, up from the prior range of $5.5-6.5 billion. The company envisions 10% growth in vehicle wholesale volumes for 2022. However, it anticipates headwinds from commodity prices and other inflationary costs to the tune of $9 billion for 2022.
(Ford's Q3 Earnings Miss, Sales Grow, '22 View Revised)
PACCAR earnings of $2.21 per share for third-quarter 2022 beat the Zacks Consensus Estimate of $2.01 and rocketed 109% from the year-ago figure. Consolidated revenues (including trucks and financial services) came in at $7,059 billion, up from $5,146.8 million recorded in the corresponding quarter of 2021. Sales from Trucks, Parts and Others were $6,687 million, which marginally missed the consensus mark of $6,692 million.
PACCAR's cash and marketable debt securities amounted to $4,762.9 million as of Sep 30, 2022, compared with $4,813 million on Dec 31, 2021. Capex and R&D expenses for 2022 are envisioned in the band of $475-$500 million and $330-$340 million, respectively. For 2023, capital expenditure and R&D costs are projected to be between $525 million and $575 million and $350 million and $400 million, respectively.
(PACCAR Q3 Earnings Top Estimates, Jump 109% Y/Y)
O'Reilly reported third-quarter 2022 adjusted earnings per share of $9.17, beating the Zacks Consensus Estimate of $8.46. Comps grew 7.6% in the reported quarter and topped the Zacks Consensus Estimate of 4.79%. The bottom line increased 13.6% from $8.07 in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $3,799.6 million, crossing the consensus mark of $3,713 million. The top line was 9% higher than the prior-year figure of $3,479.5 million.
During the quarter, the company opened 38 new stores in the United States and one in Mexico. The total store count was 5,938 as of Sep 30, 2022.For 2022, ORLY's estimates have been revised. Total revenues are now expected within the range of $14.1-$14.3 billion compared with the prior guidance of $14-$14.3 billion. Earnings per share are pegged within $32.35-$32.85, up from $31.25-$31.75 estimated earlier.
(O'Reilly Beats on Q3 Earnings & Revenues, Modifies View)
BorgWarner reported adjusted earnings of $1.24 per share for third-quarter 2022, up from 80 cents recorded in the prior-year quarter. The bottom line also beat the Zacks Consensus Estimate of $1.02 per share. The automotive equipment supplier reported net sales of $4,060 million, outpacing the Zacks Consensus Estimate of $3,977 million. The top line also moved up 18.8% year over year.
For full-year 2022, the company anticipates net sales within $15.4-$15.7 billion, indicating year-over-year growth of 12-14%. Importantly, BorgWarner envisions electric vehicle revenues of around $850 million for 2022, doubling from 2021 levels. Adjusted operating margin is expected in the band of 10-12%. Adjusted net earnings are estimated to be within $4.25-$4.45 share. Free cash flow is projected in the band of $650-$750 million.
(BorgWarner Q3 Earnings Surpass Estimates, Rise Y/Y)
What's Next in the Auto Space?
Industry watchers will keep a tab on U.S. vehicle sales data for October. Investors are also awaiting the quarterly releases of a host of auto companies that are slated to report this week.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.