The auto sector has been performing well so far this earnings season. As of Jul 27, nearly 45.5% of the sector’s companies had reported results. These companies recorded 25% year-over-year growth in earnings and 5.1% in revenues, per our Earnings Trends report. In comparison, the 208 S&P 500 companies that had reported through Jul 27 posted a 4.7% decline in earnings and a 0.4% rise in revenues.
By the end of Q2, auto sector earnings and revenue growth is projected to be around 19.1% and 2.1%, respectively. Meanwhile, total S&P 500 earnings and revenues are expected to decline 3.5% and 0.4% year over year, respectively.
Revenues of auto companies are being driven by strong sales in major markets like the U.S., Europe and China, in the first half of 2016. Meanwhile, the bottom line is benefiting from an increase in the sales of higher margin vehicle segments, such as SUVs and light trucks, due to low fuel prices.
Nonetheless, the pressure to maintain the attractive incentives and deals may strain the margins for automakers. Sluggishness in some markets and expenses related to safety recalls are other hurdles. The negative impact of foreign currency translation also remains a headwind for the auto sector.
Among the many stocks lined up to report this week, let’s see what awaits these two auto stocks slated to release their second-quarter 2016 results on Jul 29.
American Axle & Manufacturing Holdings Inc. (AXL - Free Report) carries a Zacks Rank #3 (Hold). Earnings ESP for the company is currently pegged at 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 80 cents. We note that the company delivered positive earnings surprises in each of the last four quarters, with an average beat of 12.39%.
Tenneco Inc. has an Earnings ESP of -1.25% and a Zacks Rank #3. The Most Accurate estimate of $1.58 stands below the Zacks Consensus Estimate of $1.60. The company managed to beat earnings in each of the trailing four quarters with a positive average surprise of 8.62%.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
The auto sector has been performing well so far this earnings season. As of Jul 27, nearly 45.5% of the sector’s companies had reported results. These companies recorded 25% year-over-year growth in earnings and 5.1% in revenues, per our Earnings Trends report. In comparison, the 208 S&P 500 companies that had reported through Jul 27 posted a 4.7% decline in earnings and a 0.4% rise in revenues.
By the end of Q2, auto sector earnings and revenue growth is projected to be around 19.1% and 2.1%, respectively. Meanwhile, total S&P 500 earnings and revenues are expected to decline 3.5% and 0.4% year over year, respectively.
Revenues of auto companies are being driven by strong sales in major markets like the U.S., Europe and China, in the first half of 2016. Meanwhile, the bottom line is benefiting from an increase in the sales of higher margin vehicle segments, such as SUVs and light trucks, due to low fuel prices.
Nonetheless, the pressure to maintain the attractive incentives and deals may strain the margins for automakers. Sluggishness in some markets and expenses related to safety recalls are other hurdles. The negative impact of foreign currency translation also remains a headwind for the auto sector.
Among the many stocks lined up to report this week, let’s see what awaits these two auto stocks slated to release their second-quarter 2016 results on Jul 29.
American Axle & Manufacturing Holdings Inc. (AXL - Free Report) carries a Zacks Rank #3 (Hold). Earnings ESP for the company is currently pegged at 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 80 cents. We note that the company delivered positive earnings surprises in each of the last four quarters, with an average beat of 12.39%.
Tenneco Inc. has an Earnings ESP of -1.25% and a Zacks Rank #3. The Most Accurate estimate of $1.58 stands below the Zacks Consensus Estimate of $1.60. The company managed to beat earnings in each of the trailing four quarters with a positive average surprise of 8.62%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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