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Auto Stocks to Watch for Earnings on Jul 25: GM, F & More

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The second-quarter 2018 earnings season for the Auto sector is now in full swing and many big releases lined up this week. Two important auto companies, Genuine Parts Company (GPC - Free Report) and WABCO Holdings Inc. have already reported with earnings and revenues beat.

Per the latest Earnings Preview, 48 companies under the S&P 500 category have reported earnings results. These companies’ beat ratios were 89.6% and 83.3% for earnings and revenues, respectively.

For second-quarter 2018, earnings for auto companies are expected to decline 9.3% on a year-over-year basis and revenues are likely to increase 3.4%. However, the S&P 500 companies are likely to witness 20.4% and 8.3% year-over-year growth in earnings and revenues, respectively, in the quarter under review.

In 2018, auto industry sales have witnessed an upward trend. A robust job market and favorable tax measures have boosted the consumer demand, which, in turn, is aiding sales. So far this year, worries related to high interest rates and growing oil prices have not stopped Americans from spending on pickup trucks and sport utility vehicles (SUVs). In fact, this shifting preference, from conventional passenger cars toward spacious vehicles, has prompted automakers to reorient their business strategies and invest hugely. In the changing situation, big discounts are playing a huge role in helping automakers grab a higher share of the market or at least retain their share. However, these discounts are putting pressure on their margins.

Additionally, automakers are changing gears due to the compulsion to move toward an all-electric vehicle (EVs) future alongside considerable investments toward autonomous driving technology. In between all these developments, recalls is a serious issue.

Now, let’s take a closer look at four big names in the auto industry — General Motors Company (GM - Free Report) , Ford Motor Company (F - Free Report) , Fiat Chrysler Automobiles N.V. and Dana Incorporated (DAN - Free Report) — which are set to announce results on Jul 25.

We relied on the proven Zacks quantitative model, combining a favorable Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold), with a positive Earnings ESP, to predict the chances of earnings beat this quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Per our proprietary methodology, Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that with the ideal combination of the two key ingredients — Zacks Rank and Earnings ESP — chances of a positive surprise are as high as 70% for the stocks lined up for an earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Detroit, MI-based General Motors is a leading global automotive company. The company is engaged in designing, building and selling of cars, trucks, crossovers and automobile parts worldwide. Our proven model does not conclusively predict an earnings beat for General Motors. This is because it has an Earnings ESP of -3.46% and a Zacks Rank #2. (Read more: General Motors to Report Q2 Earnings: What's in Store?)

Ford is an automotive, financial services and mobility company, with operations in the United States and across the world. Our proven model does not conclusively predict an earnings beat for Ford. This is because it has an Earnings ESP of +3.26% and a Zacks Rank #4 (Sell). (Read more: Ford Set to Report Q2 Earnings: What's in the Cards?

Ford Motor Company Price and EPS Surprise

Ford Motor Company Price and EPS Surprise | Ford Motor Company Quote

Fiat Chrysler is an international automotive company, which is engaged in designing, engineering, manufacturing, distributing and selling of vehicles, and components and production systems. Our proven model does not conclusively predict an earnings beat for Fiat Chrysler. This is because it has an Earnings ESP of -8.08% and a Zacks Rank #5 (Strong Sell).

Dana is a provider of technology driveline, sealing and thermal-management products. Per our proven model, the company is likely to record an earnings beat as it has an  Earnings ESP of +0.86% and a Zacks Rank #3.

Dana Incorporated Price and EPS Surprise

Dana Incorporated Price and EPS Surprise | Dana Incorporated Quote

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