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Auto Stock Roundup: Ford, Harley, PACCAR Earnings Beat, Genuine Parts Miss

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The past week saw several important auto companies including Genuine Parts Company (GPC - Free Report) , PACCAR Inc. (PCAR - Free Report) , Harley-Davidson Inc. (HOG - Free Report) , Penske Automotive Group, Inc. (PAG - Free Report) and Ford Motor Company (F - Free Report) reporting their quarterly numbers. While Ford, Penske Automotive, Harley-Davidson and PACCAR beat on earnings, Genuine Parts Company missed the estimate.

However, per the latest Earnings Trends, as of Apr 25, 154 companies from the S&P 500 category have already announced their results. First-quarter 2018 earnings and revenue growth for auto companies are expected to be in the negative territory. However, during the quarter, the S&P 500 companies are anticipated to record 20% and 8% year-over-year growth in earnings and revenues, respectively.

In fact, the auto sector has lately been stifled with several issues. Trade tensions between China and the United States, the changing preference pattern of consumers, and safety recall issues are some of the challenges faced by automakers. However, a strong job market and tax reforms are driving consumer demand, which in turn are pushing up auto sales.
 
(Read the previous roundup here: Auto Stock Roundup for Apr 19, 2018)

Recap of the Week’s Most Important Stories

1.    Genuine Parts Company reported adjusted earnings of $1.27 per share, missing the Zacks Consensus Estimate of $1.32. Adjusted earnings per share in the year-ago quarter were $1.08.

The company recorded net income of $176.6 million in first-quarter 2018, up from $160.2 million in the prior-year quarter.

Genuine Parts reported net sales of $4.59 billion, up 17% year over year. The figure surpassed the Zacks Consensus Estimate of $4.5 billion.
 
The rise was driven by its global automotive and industrial businesses. Total sales included 2% organic growth, 14% from acquisitions (including Alliance Automotive Group (AAG)) and 1% benefit from foreign currency translation.

Operating profit increased to $318.5 million from $286.9 million in first-quarter 2017. Selling, administrative and other expenses rose to $1.1 billion from $874 million a year ago.

Revenues from the Automotive group’s net sales improved 29.6% to $2.6 billion from the year-ago figure of $2 billion. Moreover, the group’s operating profit rose to $184.7 million in the reported quarter from $151.8 million a year ago.

Effective Jan 1, 2018, the company’s Electrical/Electronic Material segment became a division of the Industrial segment. Further, the results of both the segments were reported under the Industrial Parts Group. The Industrial Parts group’s net sales rose 8.3% year over year to $1.55 billion. Operating profit, however, increased to $112 million from $104 million in the year-ago quarter.

The S. P. Richards or Business Products group’s net sales declined 4.8% to $474 million. Operating profit at the segment declined to $21.6 million from $31.1 million recorded in the prior-year quarter. (Read more: Genuine Parts Q1 Earnings Miss, Revenues Top Estimates)

Genuine Parts carries a Zacks Rank #4 (Sell).

2.    PACCAR Inc.’s first-quarter 2018 adjusted earnings were $1.45 per share, up from 88 cents recorded in the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.31. Results were aided by record quarterly truck deliveries, robust Parts revenues and pretax profits.

During the quarter, PACCAR posted quarterly consolidated net sales and revenues of $5.65 billion. Its revenues from the Truck, Parts and Other segment were $5.32 billion. The Zacks Consensus Estimate for revenues was $5.03 billion.

Revenues from the Truck, Parts and Other segment increased to $5.32 billion from $3.94 billion in first-quarter 2017. The segment’s pre-tax income increased to $591.9 million from $383.3 million, recorded a year ago.

Revenues from the Financial Services segment (comprising a portfolio of 187,000 trucks and trailers with total assets of $13.59 billion) rose to $332.2 million from $302.2 million a year ago. Pre-tax income increased to $67.5 million from $56.8 million in the year-ago quarter. (Read more: PACCAR Earnings and Revenues Beat Estimates in Q1)

PACCAR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

3.    Harley-Davidson reported adjusted earnings of $1.03 per share in first-quarter 2018, beating the Zacks Consensus Estimate of 89 cents. Adjusted earnings in the year-ago quarter were $1.05.

Net income decreased to $174.8 million from $186.4 million registered a year ago.

Motorcycle and related products revenues rose to $1.36 billion in the reported quarter compared with $1.33 billion in the prior-year quarter. The figure surpassed the Zacks Consensus Estimate of $1.26 billion. The company also logged consolidated revenues of $1.54 billion, improving from the prior-year figure of $1.5 billion.

Operating income declined to $236 million from $289 million in the year-ago period.

Operating income from Motorcycles and Related Products declined to $172.8 million from $236.5 million recorded a year ago.

The company shipped 63,944 motorcycles during the quarter under review compared with 70,831 shipments in first-quarter 2017.

Harley-Davidson’s retail motorcycle sales in the United States declined 12% to 29,309 units. International sales gained 0.2% to 21,777 motorcycles from 21,733 in the prior-year quarter. During the quarter, Latin America and the Middle East and Africa (EMEA) region sales gained 7% and 6.8%, respectively, while Canada and Asia-Pacific region’s sales declined 11.9% and 7.8%, respectively.

Harley-Davidson’s worldwide retail motorcycle sales fell 7.2% to 51,086 units from 55,049 motorcycles in the year-ago quarter.

Revenues from Parts and Accessories gained 0.6% to $169 million. Similarly, the metric for General Merchandise — including MotorClothes apparel and accessories — rose 1.4% to $56.6 million. (Read more: Harley-Davidson Q1 Earnings Beat Estimates, Falls Y/Y)

Harley-Davidson carries a Zacks Rank #4.

4.    In first-quarter fiscal 2018, Penske Automotive recorded adjusted earnings of $1.25 per share, which surpassed the Zacks Consensus Estimate of $1.12. Including tax benefits, net earnings came in at $1.26 per share. The company recorded net earnings of 97 cents per share in the year-ago quarter.

Income from continuing operations jumped 28.8% year over year to $107.7 million in the reported quarter from $83.6 million a year ago.
 
Revenues rose 13.1% year over year to $5.7 billion, beating the Zacks Consensus Estimate of $5.2 billion. Same-store retail unit sales jumped 0.4% year over year to 111,240 units and retail unit sales increased 6.4% to 132,490.

While gross profit increased 11.6% to $864.4 million from $774.3 million in the prior-year quarter, operating income grew 17% to $175.7 million from $150.2 million.

Per the company, record results were driven by outstanding performance across each area of its business, which demonstrates the strength of its diversified transportation services model.

The company operates under three reportable segments namely Retail Automotive, Retail Commercial Trucks and Commercial Vehicles Australia/Power Systems and Other.

Revenues from Retail Automotive rose to $5.3 billion from the year-ago figure of $4.8 billion.

Revenues from Retail Commercial Trucks increased to $292.4 million from $211.7 million in the year-ago quarter.

In the reported quarter, revenues from Commercial Vehicles Australia/Power Systems and Other grew to $158.5 million from $113 million a year ago. (Read More: Penske Automotive’s Q1 Earnings & Sales Top Estimates)

Penske Automotive carries a Zacks Rank #3.

5.    Ford posted adjusted earnings per share of 43 cents in the first quarter of 2018. The reported figure was 3 cents higher than the year-ago figure. Also, earnings beat the Zacks Consensus Estimate of 41 cents per share.

The company identified an incremental $11.5 billion of costs and efficiency opportunities. It expects adjusted EBIT margin of 8% by 2020, two years earlier than the previous target. It also intends to lower cumulative capital spending by $5 billion between 2019 and 2022.

First-quarter net income was $1.7 billion, reflecting an increase of $0.1 billion from the year-ago quarter.

During the reported quarter, Ford logged automotive revenues of $39 billion, up from the prior-year figure of $36.5 billion. Its Zacks Consensuses Estimate for revenues was $37 billion. Ford carries a Zacks Rank #3.

Performance

Last week, Toyota Motor Corporation (TM - Free Report) reported the maximum increase. Tesla, Inc. (TSLA - Free Report) recorded maximum decline in price.

In the past six months, the maximum rise was recorded by Advance Auto Parts, Inc. while General Motors Company’s shares declined the most.

CompanyLast WeekLast 6 Months
GM-2.1%-14.6%
F-0.6%-7.9%
TSLA-4.3%-12.5%
TM1.6%5.5%
HMC-0.1%11.9%
HOG1%-11.5%
AAP0.4%31.6%
AZO0.3%4.7%



What’s Next in the Auto Space?

Watch out for the usual news releases of other auto companies over the next week. Also, look for the earnings releases of some important auto companies.

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