The third-quarter earnings season is in full swing. A few important companies in the Auto sector — including Ford Motor Company (F Quick QuoteF - Free Report) , Tesla, Inc. (TSLA Quick QuoteTSLA - Free Report) , PACCAR Inc. (PCAR Quick QuotePCAR - Free Report) and Harley-Davidson, Inc. (HOG Quick QuoteHOG - Free Report) — have released their earnings in the past week. Per the latest Earnings Preview as of Oct 24, 139 companies under the S&P 500 category have already announced third-quarter results.

These companies recorded estimate beat ratios of 82% and 62.6% in earnings and revenues, respectively.

On a year-over-year basis, earnings for the auto sector are expected to decline 5.8% while revenues are likely to gain 2%. However, the S&P 500 companies are estimated to record respective 20% and 7.2% year-over-year rise in earnings and revenues in the quarter under review.

Ford’s third-quarter 2018 adjusted earnings came in line with the Zacks Consensus Estimate. Results were impacted by challenges faced by the company in China market and high commodity costs. Tesla posted impressive results and earned profit for the first time in two years. Both PACCAR and Harley-Davidson recorded earnings beats for third-quarter 2018.

Recap of the Week’s Most Important Stories

1.    PACCAR’s third-quarter 2018 earnings were $1.55 per share, up from $1.14 recorded in the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.50. Results were aided by robust global truck deliveries and aftermarket sales.

PACCAR posted quarterly consolidated net sales and revenues of $5.76 billion. Its adjusted revenues were $5.42 billion. The Zacks Consensus Estimate of revenues was $5.5 billion.

Revenues from the Truck, Parts and Other segment increased to $5.42 billion in third-quarter 2018 from $4.73 billion in third-quarter 2017. The segment’s pre-tax income increased to $573.6 million from $502.2 million recorded a year ago.

Revenues from the Financial Services segment rose to $339.9 million from $328.2 million a year ago. Pre-tax income increased to $78.8 million from $70.6 million in the year-ago quarter. (Read more: PACCAR Q3 Earnings Surpass Estimates, Improve Y/Y)

PACCAR currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2.    Harley-Davidson reported adjusted earnings of 68 cents per share in third-quarter 2018, beating the Zacks Consensus Estimate of 47 cents. In the prior-year quarter, the figure was 40 cents.

Net income augmented to $113.9 million from $68.2 million registered a year ago.

Revenues from the Motorcycle and Related Products segment increased to $1.12 billion in the reported quarter, which was almost in line with the Zacks Consensus Estimate of $1.1 billion. In the prior-year quarter, the figure was $962 million. The company also reported consolidated revenues of $1.32 billion, marking an increase from the prior-year figure of $1.15 billion. Harley-Davidson witnessed an improved international retail sales growth.

Operating income from the Motorcycles and Related Products segment rose to $65.7 million from $17.4 million recorded a year ago. Further, operating margin was 5.8% compared with 1.8% recorded in the year-ago quarter. This rise was primarily due to higher gross margin and lower SG&A as a percent of revenues compared with the prior-year quarter.

For the quarter ending on Sep 30, the company shipped 48,639 motorcycles compared with 41,662 in third-quarter 2017. (Read more: Harley-Davidson Q3 Earnings Beat Estimates, Up Y/Y)

Harley-Davidson currently carries a Zacks Rank #3 (Hold).

3.    WABCO Holdings Inc.’s third-quarter 2018 earnings were $1.78 per share, beating the Zacks Consensus Estimate of $1.60. Moreover, the bottom line improved 4.1% from the prior-year quarter figure of $1.71.

On a reported basis, total revenues rose 10.5% to $914.8 million from $827.8 million a year ago. However, revenues lagged the Zacks Consensus Estimate of $934 million. During the quarter under review, global truck and bus production decreased by 8% on a year-over-year basis.

During the reported quarter, gross profit was $275.1 million compared with $249.6 million recorded in third-quarter 2017. Adjusted operating expenses rose to $163.1 million from $136.1 million in the prior-year quarter.

WABCO had cash and cash equivalents of $832.2 million as of Sep 30, 2018, compared with $1.14 billion as of Dec 31, 2017. The company’s long-term debt was $861.7 million as of Sep 30, 2018, marking a decline from $1.02 billion as of Dec 31, 2017.

In third-quarter 2018, WABCO witnessed net cash inflow of $134.4 million from operations compared with $84.1 million a year ago. (Read more: WABCO Q3 Earnings Drive Past Estimates, Revenues Miss)

WABCO currently carries a Zacks Rank #3.

4.    Ford reported third-quarter 2018 adjusted earnings per share of 29 cents, which is in line with the Zacks Consensus Estimate. In the prior-year quarter, adjusted earnings were 44 cents per share. Results were impacted by challenges faced by the company in China market and high commodity costs.

Adjusted EBIT in the third quarter was $1.67 billion, reflecting a decrease from $2.3 billion recorded in the year-ago quarter.

During the reported quarter, Ford logged automotive revenues of $34.7 billion, up from the prior-year quarter figure of $33.6 billion. The Zacks Consensus Estimate for revenues was $32.1 billion.

During the reported quarter, wholesale volume at the Ford Automotive segment declined by 151,000 units to 1.35 million. Earnings before income and taxes (EBIT) were $1.4 billion, a decline of $500 million from the year-ago quarter.

In North America, revenues decreased by $1.4 billion year over year to $22.3 billion during the reported quarter. Wholesale volumes declined by 6,000 units to 644,000. Further, EBIT was $2 billion, marking an increase of $100 million from the year-ago quarter. The rise is majorly due to higher sales of Ford trucks and sports utility vehicles (SUVs).

In South America, revenues slumped by $200 million year over year to $1.3 billion. Pre-tax loss amounted to $152 million, majorly due to higher commodity costs and weaker currencies. Moreover, wholesale volumes declined by 9,000 units to 94,000.

In Europe, revenues increased by $500 million to $7.4 billion. Wholesale volumes rose 14,000 units to around 356,000. However, the region incurred pre-tax loss of $245 million, owing to weakness in countries — including Turkey and Russia — along with high costs related to the launch of ‘Focus’.

In the Middle East & Africa segment, revenues declined by $41 million year over year to $600 million due to lower volume. Further, wholesale volume declined by 5,000 units to 27,000. The region recorded EBIT of $47 million.

In the Asia-Pacific region, revenues decreased by $600 million to $3.1 billion. Wholesale volumes declined by 145,000 units to 234,000. Further, the region incurred pre-tax loss of $208 million.

Ford currently carries a Zacks Rank #5 (Sell).

5.    Tesla has reported earnings per share of $2.90 in third-quarter 2018, surpassing the Zacks Consensus Estimate of loss of 55 cents. The company reported loss of $2.92 per share in the prior-year quarter.

During the reported quarter, net income attributable to common shareholders amounted $516.2 million compared with the year-ago net loss of $488.5 million.

Revenues increased to $6.8 billion from $3 billion registered in third-quarter 2017. The figure surpassed the Zacks Consensus Estimate of $5.7 billion.

During the quarter under review, Tesla delivered 27,710 Model S and Model X vehicles, and 56,065 Model 3 vehicles to the customers.

Total automotive revenues, including revenues from automotive sales and leasing, increased appreciably year over year to $6.1 billion in the reported quarter. The rise was due to a robust increase in Model 3 deliveries.

Energy generation and storage revenues increased from $317.5 million in third-quarter 2017 to $399.3 million in the reported quarter. The rise was mainly due to considerable growth of energy-storage deployments, and higher mix of cash and loan sales for solar deployments.

Services and other revenues increased 21.1% year over year to $445 million, primarily due to higher used-car sales.

Tesla’s third-quarter 2018 automotive gross margin was 25.8%, increasing 752 basis points (bps) from third-quarter 2017.

Energy generation and storage gross margin declined 804 bps on a year-over-year basis to 17.2%.

Tesla currently carries a Zacks Rank #3.

Performance

In the last week, shares of Harley-Davidson declined the most, while Tesla gained the maximum.

In the past six months, Advance Auto Parts, Inc. (AAP Quick QuoteAAP - Free Report) has increased the most, whereas Ford declined the most.

What’s Next in the Auto Space?

Watch out for the usual news releases as well as the earnings releases over the next week.

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