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Auto Stocks to Report Q1 Earnings on Apr 27: F, BWA & More
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The auto sector has recorded a weak performance so far in the Q1 earnings season. As of Apr 21, 20% of the sector’s companies reported results. Per our latest Earnings Preview, these companies recorded 15.2% year-over-year fall in earnings and 1.1% decline in revenues. In comparison, the 95 S&P 500 companies that reported through Apr 21 posted a 14.3% growth in earnings and a 4.6% rise in revenues.
The below par performance is expected to continue for the rest of this earnings season. By Q1-end, auto sector earnings are projected to decline 20%, while revenues are expected to inch up 0.2%. Meanwhile, total S&P 500 earnings and revenues are expected to increase 9.1% and 6% year over year, respectively.
Automakers are facing certain weaknesses recently. A major issue for most manufacturers in recent years has been the safety recalls and related costs. Recall-related repair costs have raised the financial burden of these companies. Their margins and bottom line are also strained by the pressure of maintaining attractive incentives and deals to boost volumes. Moreover, the overall industry saw declining sales in the U.S. in Q1.
Meanwhile, strong sales growth in other major markets, like China and Europe, has been the primary driving factor for the auto sector in Q1. Additionally, low fuel prices enhanced the sales of higher margin vehicle segments, such as SUVs and light trucks. With these factors in mind, let’s see what awaits these five auto stocks that are slated to release their Q1 results on Apr 27.
CNH Industrial N.V. (CNHI - Free Report) beat earnings in three of the trailing four quarters but missed in one, delivering a negative average surprise of 6.82%.
Our proven model shows that CNH Industrial 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. The company has the right combination of two key ingredients.
The company has an Earnings ESP of +33.33% as the Most Accurate estimate is pegged at 4 cents while the Zacks Consensus Estimate stands at 3 cents. CNH Industrial currently carries a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
BorgWarner Inc. (BWA - Free Report) has an Earnings ESP of 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 84 cents. It posted positive earnings surprises in each of the last four quarters, with a positive average surprise of 1.55%. BorgWarner currently carries a Zacks Rank #2 as well. You can see the complete list of today’s Zacks #1 Rank stocks here.
Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Ford Motor Company (F - Free Report) currently has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 34 cents. Ford delivered two positive and two negative earnings surprises in the trailing four quarters, with a positive average surprise of 15.59%. The company carries a Zacks Rank #3. This makes prediction difficult as the company needs to have both a positive ESP as well as a Zacks Rank #1, 2 or 3.
LKQ Corporation (LKQ - Free Report) has an Earnings ESP of -4.35% because the Most Accurate estimate is pegged at 44 cents, lower than the Zacks Consensus Estimate of 46 cents. LKQ Corp currently carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Visteon Corporation (VC - Free Report) beat earnings in each of the trailing four quarters, delivering a positive average surprise of 47.09%. The company has an Earnings ESP of +5.80% as the Most Accurate estimate is pegged at $1.46 while the Zacks Consensus Estimate stands at $1.38. Visteon currently carries a Zacks Rank #3. The company has the right combination of Zacks Rank and positive Earnings ESP, making a beat likely.
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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Auto Stocks to Report Q1 Earnings on Apr 27: F, BWA & More
The auto sector has recorded a weak performance so far in the Q1 earnings season. As of Apr 21, 20% of the sector’s companies reported results. Per our latest Earnings Preview, these companies recorded 15.2% year-over-year fall in earnings and 1.1% decline in revenues. In comparison, the 95 S&P 500 companies that reported through Apr 21 posted a 14.3% growth in earnings and a 4.6% rise in revenues.
The below par performance is expected to continue for the rest of this earnings season. By Q1-end, auto sector earnings are projected to decline 20%, while revenues are expected to inch up 0.2%. Meanwhile, total S&P 500 earnings and revenues are expected to increase 9.1% and 6% year over year, respectively.
Automakers are facing certain weaknesses recently. A major issue for most manufacturers in recent years has been the safety recalls and related costs. Recall-related repair costs have raised the financial burden of these companies. Their margins and bottom line are also strained by the pressure of maintaining attractive incentives and deals to boost volumes. Moreover, the overall industry saw declining sales in the U.S. in Q1.
Meanwhile, strong sales growth in other major markets, like China and Europe, has been the primary driving factor for the auto sector in Q1. Additionally, low fuel prices enhanced the sales of higher margin vehicle segments, such as SUVs and light trucks. With these factors in mind, let’s see what awaits these five auto stocks that are slated to release their Q1 results on Apr 27.
CNH Industrial N.V. (CNHI - Free Report) beat earnings in three of the trailing four quarters but missed in one, delivering a negative average surprise of 6.82%.
Our proven model shows that CNH Industrial 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. The company has the right combination of two key ingredients.
The company has an Earnings ESP of +33.33% as the Most Accurate estimate is pegged at 4 cents while the Zacks Consensus Estimate stands at 3 cents. CNH Industrial currently carries a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CNH Industrial N.V. Price and EPS Surprise
CNH Industrial N.V. Price and EPS Surprise | CNH Industrial N.V. Quote
BorgWarner Inc. (BWA - Free Report) has an Earnings ESP of 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 84 cents. It posted positive earnings surprises in each of the last four quarters, with a positive average surprise of 1.55%. BorgWarner currently carries a Zacks Rank #2 as well. You can see the complete list of today’s Zacks #1 Rank stocks here.
Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
BorgWarner Inc. Price and EPS Surprise
BorgWarner Inc. Price and EPS Surprise | BorgWarner Inc. Quote
Ford Motor Company (F - Free Report) currently has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 34 cents. Ford delivered two positive and two negative earnings surprises in the trailing four quarters, with a positive average surprise of 15.59%. The company carries a Zacks Rank #3. This makes prediction difficult as the company needs to have both a positive ESP as well as a Zacks Rank #1, 2 or 3.
Ford Motor Company Price and EPS Surprise
Ford Motor Company Price and EPS Surprise | Ford Motor Company Quote
LKQ Corporation (LKQ - Free Report) has an Earnings ESP of -4.35% because the Most Accurate estimate is pegged at 44 cents, lower than the Zacks Consensus Estimate of 46 cents. LKQ Corp currently carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
LKQ Corporation Price and EPS Surprise
LKQ Corporation Price and EPS Surprise | LKQ Corporation Quote
Visteon Corporation (VC - Free Report) beat earnings in each of the trailing four quarters, delivering a positive average surprise of 47.09%. The company has an Earnings ESP of +5.80% as the Most Accurate estimate is pegged at $1.46 while the Zacks Consensus Estimate stands at $1.38. Visteon currently carries a Zacks Rank #3. The company has the right combination of Zacks Rank and positive Earnings ESP, making a beat likely.
Visteon Corporation Price and EPS Surprise
Visteon Corporation Price and EPS Surprise | Visteon Corporation Quote
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>