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Honda (HMC) to Report Q3 Earnings: Is a Surprise in Store?
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Honda Motor Co., Ltd. (HMC - Free Report) is set to report third-quarter fiscal 2017 (ended Dec 31, 2016) results on Feb 3. In the last quarter, the company posted a positive earnings surprise of 64.41%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Honda is concentrating on infrastructural development in North and South America to boost production. The automaker is also focused on introducing new products and expanding its business in Asia to attract more customers. The company’s attractive car launches help boost sales volume. Driven by these, Honda reported a 3.2% rise in U.S. sales to a record 1.64 million vehicles in 2016. The company also has an impressive line-up of motorcycles.
However, Honda is witnessing declining sales volume in its domestic market, Japan. Moreover, higher research and development expenses are affecting the company’s operating income. It increased 4.3% year over year in first-quarter fiscal 2017 and is expected to increase for the fiscal.
Further, Honda is affected by the frequent recalls to fix faulty Takata airbags. The Japanese automaker is the largest customer of the airbags that have been found to occasionally explode and shoot out metal fragments in a crashed vehicle.
Price Performance
The performance of Honda’s shares has been marginally weaker than the Zacks categorized Automotive-Foreign industry in the last three months. The company has recorded an improvement of nearly 0.4%, while the industry’s gains have inched up 0.7%.
Earnings Whispers
Our proven model does not conclusively show that Honda 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. Honda’s Earnings ESP is 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 49 cents.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Honda sports a Zacks Rank #1 (Strong Buy). Though a Zacks Rank #1, 2 (Buy) or 3 (Hold) increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some 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:
Delphi Automotive PLC has an Earnings ESP of +1.88% and a Zacks Rank #3. The company is expected to report fourth-quarter and full-year 2016 results on Feb 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Autoliv Inc. (ALV - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #3. The company’s fourth-quarter and full-year 2016 financial results are scheduled for release on Feb 2.
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #3. The company is expected to report fourth-quarter and full-year 2016 financial numbers on Feb 10.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Honda (HMC) to Report Q3 Earnings: Is a Surprise in Store?
Honda Motor Co., Ltd. (HMC - Free Report) is set to report third-quarter fiscal 2017 (ended Dec 31, 2016) results on Feb 3. In the last quarter, the company posted a positive earnings surprise of 64.41%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Honda is concentrating on infrastructural development in North and South America to boost production. The automaker is also focused on introducing new products and expanding its business in Asia to attract more customers. The company’s attractive car launches help boost sales volume. Driven by these, Honda reported a 3.2% rise in U.S. sales to a record 1.64 million vehicles in 2016. The company also has an impressive line-up of motorcycles.
However, Honda is witnessing declining sales volume in its domestic market, Japan. Moreover, higher research and development expenses are affecting the company’s operating income. It increased 4.3% year over year in first-quarter fiscal 2017 and is expected to increase for the fiscal.
Further, Honda is affected by the frequent recalls to fix faulty Takata airbags. The Japanese automaker is the largest customer of the airbags that have been found to occasionally explode and shoot out metal fragments in a crashed vehicle.
Price Performance
The performance of Honda’s shares has been marginally weaker than the Zacks categorized Automotive-Foreign industry in the last three months. The company has recorded an improvement of nearly 0.4%, while the industry’s gains have inched up 0.7%.
Earnings Whispers
Our proven model does not conclusively show that Honda 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. Honda’s Earnings ESP is 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 49 cents.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Honda sports a Zacks Rank #1 (Strong Buy). Though a Zacks Rank #1, 2 (Buy) or 3 (Hold) increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Honda Motor Company, Ltd. Price and EPS Surprise
Honda Motor Company, Ltd. Price and EPS Surprise | Honda Motor Company, Ltd. Quote
Stocks to Consider
Here are some 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:
Delphi Automotive PLC has an Earnings ESP of +1.88% and a Zacks Rank #3. The company is expected to report fourth-quarter and full-year 2016 results on Feb 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Autoliv Inc. (ALV - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #3. The company’s fourth-quarter and full-year 2016 financial results are scheduled for release on Feb 2.
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #3. The company is expected to report fourth-quarter and full-year 2016 financial numbers on Feb 10.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>