The auto sector has been the second-best performer in terms of earnings among the 16 Zacks sectors so far. As of Jul 29, nearly 81.8% of the sector’s companies had reported results. These companies recorded 18.8% year-over-year growth in earnings and 5.8% in revenues, per our Earnings Trends report. In comparison, the 317 S&P 500 companies that had reported through Jul 29 posted a 3.3% decline in earnings and a 0.9% fall in revenues. By the end of Q2, auto sector earnings and revenue growth is projected to be around 15.5% and 2.1%, respectively. Meanwhile, total S&P 500 earnings and revenues are expected to decline 3.4% 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.
So, let’s see what awaits these five auto stocks that are queued up for earnings releases on Aug 3.
Tesla Motors, Inc. (TSLA - Free Report) carries a Zacks Rank #3 (Hold). Earnings ESP for the company is currently 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of $1.15. We note that the company delivered negative earnings surprises in three of the last four quarters, with an average negative surprise of 84.91% (read more: Will Tesla Report a Loss Again in Q2 Earnings?)
Delphi Automotive PLC has an Earnings ESP of -0.65% because the Most Accurate estimate is $1.54, while the Zacks Consensus Estimate is pegged at $1.55. The company, carrying a Zacks Rank #4 (Sell), delivered a positive earnings surprise in three of the last four quarters. This resulted in a positive average surprise of 0.93% (read more: What's in Store for Delphi Automotive's Q2 Earnings?)
Fox Factory Holding Corp (FOXF - Free Report) carries a Zacks Rank #3. The Earnings ESP for the company is 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 28 cents. We note that the company delivered positive earnings surprises in each of the trailing four quarters, with an average positive surprise of 9.37%.
Meritor, Inc. has an Earnings ESP of -2.27% and a Zacks Rank #5 (Strong Sell). The Most Accurate estimate is 43 cents, while the Zacks Consensus Estimate is pegged at 44 cents. Meritor beat earnings estimates in two of the trailing four quarters and missed in one quarter. This resulted in a positive average surprise of 12.6%.
Westport Fuel Systems Inc. (WPRT - Free Report) carries a Zacks Rank #3. The Earnings ESP for the company is currently pegged at +9.09% as the Most Accurate estimate of a loss of 20 cents stands above the Zacks Consensus Estimate of a loss of 22 cents. We note that the company delivered a negative earnings surprise in each of the last four quarters. This resulted in a negative average surprise of 50% (read more: What Awaits Westport Innovations in Q2 Earnings?)
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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 the second-best performer in terms of earnings among the 16 Zacks sectors so far. As of Jul 29, nearly 81.8% of the sector’s companies had reported results. These companies recorded 18.8% year-over-year growth in earnings and 5.8% in revenues, per our Earnings Trends report. In comparison, the 317 S&P 500 companies that had reported through Jul 29 posted a 3.3% decline in earnings and a 0.9% fall in revenues. By the end of Q2, auto sector earnings and revenue growth is projected to be around 15.5% and 2.1%, respectively. Meanwhile, total S&P 500 earnings and revenues are expected to decline 3.4% 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.
So, let’s see what awaits these five auto stocks that are queued up for earnings releases on Aug 3.
Tesla Motors, Inc. (TSLA - Free Report) carries a Zacks Rank #3 (Hold). Earnings ESP for the company is currently 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of $1.15. We note that the company delivered negative earnings surprises in three of the last four quarters, with an average negative surprise of 84.91% (read more: Will Tesla Report a Loss Again in Q2 Earnings?)
Delphi Automotive PLC has an Earnings ESP of -0.65% because the Most Accurate estimate is $1.54, while the Zacks Consensus Estimate is pegged at $1.55. The company, carrying a Zacks Rank #4 (Sell), delivered a positive earnings surprise in three of the last four quarters. This resulted in a positive average surprise of 0.93% (read more: What's in Store for Delphi Automotive's Q2 Earnings?)
Fox Factory Holding Corp (FOXF - Free Report) carries a Zacks Rank #3. The Earnings ESP for the company is 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 28 cents. We note that the company delivered positive earnings surprises in each of the trailing four quarters, with an average positive surprise of 9.37%.
Meritor, Inc. has an Earnings ESP of -2.27% and a Zacks Rank #5 (Strong Sell). The Most Accurate estimate is 43 cents, while the Zacks Consensus Estimate is pegged at 44 cents. Meritor beat earnings estimates in two of the trailing four quarters and missed in one quarter. This resulted in a positive average surprise of 12.6%.
Westport Fuel Systems Inc. (WPRT - Free Report) carries a Zacks Rank #3. The Earnings ESP for the company is currently pegged at +9.09% as the Most Accurate estimate of a loss of 20 cents stands above the Zacks Consensus Estimate of a loss of 22 cents. We note that the company delivered a negative earnings surprise in each of the last four quarters. This resulted in a negative average surprise of 50% (read more: What Awaits Westport Innovations in Q2 Earnings?)
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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