Back to top

Image: Bigstock

Auto Stocks to Post Q1 Earnings on May 2: DAN, CMI & Others

Read MoreHide Full Article

So far, the auto sector has recorded a below par performance this earnings season. As of Apr 28, 80% of the sector’s companies reported results. Per our latest Earnings Preview, these companies recorded 10.2% year-over-year decline in earnings and 3.4% rise in revenues. Comparatively, the 288 S&P 500 companies that reported through Apr 28 recorded 13.7% growth in earnings and an 8.2% rise in revenues.

The weak performance is expected to persist for the rest of this earnings season. By Q1-end, auto sector earnings are projected to decline 9.2%, while revenues are expected to inch up 0.2%. Meanwhile, total S&P 500 earnings and revenues are expected to increase 11.2% and 4.8% year over year, respectively.

Automakers are lately facing certain weaknesses. Safety recalls and related cost have become a primary issue for the majority of manufacturers in recent times. Recall-related repair costs have increased 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.

However, 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 four auto stocks that are scheduled to release their Q1 results on May 2.

Dana Incorporated (DAN - Free Report) beat earnings in three of the trailing four quarters and missed in one, delivering an average positive surprise of 14.27%.

Our proven model does not show that Dana 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 an Earnings ESP of -2.63%, as the Most Accurate estimate is pegged at 37 cents, lower than the Zacks Consensus Estimate of 38 cents. Dana currently carries a Zacks Rank #2. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s negative ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Dana Incorporated Price and EPS Surprise

 

Dana Incorporated Price and EPS Surprise | Dana Incorporated Quote

Cummins Inc. (CMI - Free Report)  has an Earnings ESP of -0.55%, as the Most Accurate estimate stands at $1.80 per share while the Zacks Consensus Estimate is pegged at $1.81. It posted positive earnings surprises in each of the last four quarters, with a positive average surprise of 8.33%. Cummins currently carries a Zacks Rank #2. 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 negative ESP makes surprise prediction difficult.

Cummins Inc. Price and EPS Surprise

 

Cummins Inc. Price and EPS Surprise | Cummins Inc. Quote

Bayerische Motoren Werke AG (BAMXF - Free Report) currently has an Earnings ESP of 0.00%, as both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.78. The company carries a Zacks Rank #2 as well. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

Cooper-Standard Holdings Inc. (CPS - Free Report)  has an Earnings ESP of +1.58%, as the Most Accurate estimate is pegged at $2.57, higher than the Zacks Consensus Estimate of $2.53. It posted positive earnings surprises in each of the last four quarters, with a positive average surprise of 24.50%. Cooper-Standard currently carries a Zacks Rank #5 (Strong Sell). We caution against stocks with Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Sell These Stocks. Now.

Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>

Published in