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Fiat Chrysler (FCAU) Q3 Earnings: Will the Stock Disappoint?
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Fiat Chrysler Automobiles N.V. is set to report third-quarter 2016 results before the opening bell on Oct 25. Last quarter, the company posted a positive earnings surprise of 24.39%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
In third-quarter 2016, Fiat Chrysler saw higher sales in U.S. as well as Europe. This should positively affect the company’s third-quarter results. However, the company is undergoing a challenging phase owing to product recalls. Frequent product recalls increase the company’s cost burden and adversely affect results.
Moreover, the European Commission has been asked by Germany’s Transport Ministry to investigate the exhaust emissions by the company’s vehicles. It is being alleged that Fiat Chrysler may have cheated on the emissions tests with motor-management software. Last month, the head of the U.S. Environmental Protection Agency’s air-quality and transportation office, Chris Grundler, said that the company needs to invest an additional $5.1 billion to comply with U.S. fuel economy standards for 2025.
Earnings Whispers
Our proven model does not conclusively show that Fiat Chrysler is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. Fiat Chrysler’s Earnings ESP is 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 34 cents.
Zacks Rank: Fiat Chrysler carries a Zacks Rank #5 (Strong Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some auto companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Fox Factory Holding Corp (FOXF - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank #1. The company’s third-quarter 2016 financial results are expected to release on Nov 2.
Magna International Inc. (MGA - Free Report) has an Earnings ESP of +2.850% and a Zacks Rank #2. The company’s third-quarter 2016 financial results are expected to release on Nov 3.
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Fiat Chrysler (FCAU) Q3 Earnings: Will the Stock Disappoint?
Fiat Chrysler Automobiles N.V. is set to report third-quarter 2016 results before the opening bell on Oct 25. Last quarter, the company posted a positive earnings surprise of 24.39%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
In third-quarter 2016, Fiat Chrysler saw higher sales in U.S. as well as Europe. This should positively affect the company’s third-quarter results. However, the company is undergoing a challenging phase owing to product recalls. Frequent product recalls increase the company’s cost burden and adversely affect results.
Moreover, the European Commission has been asked by Germany’s Transport Ministry to investigate the exhaust emissions by the company’s vehicles. It is being alleged that Fiat Chrysler may have cheated on the emissions tests with motor-management software. Last month, the head of the U.S. Environmental Protection Agency’s air-quality and transportation office, Chris Grundler, said that the company needs to invest an additional $5.1 billion to comply with U.S. fuel economy standards for 2025.
Earnings Whispers
Our proven model does not conclusively show that Fiat Chrysler is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. Fiat Chrysler’s Earnings ESP is 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 34 cents.
Zacks Rank: Fiat Chrysler carries a Zacks Rank #5 (Strong Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
FIAT CHRYSLER Price and EPS Surprise
FIAT CHRYSLER Price and EPS Surprise | FIAT CHRYSLER Quote
Stocks to Consider
Here are some auto companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Fox Factory Holding Corp (FOXF - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank #1. The company’s third-quarter 2016 financial results are expected to release on Nov 2.
The Goodyear Tire & Rubber Company (GT - Free Report) , expected to report third-quarter 2016 financial results on Nov 3, has an Earnings ESP of +1.75% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Magna International Inc. (MGA - Free Report) has an Earnings ESP of +2.850% and a Zacks Rank #2. The company’s third-quarter 2016 financial results are expected to release on Nov 3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>