Earnings and U.S. sales data dominated the headlines in the auto sector last week. While Ford Motor Co. (F - Free Report) missed earnings estimates, Tesla Motors, Inc. (TSLA - Free Report) posted a wider-than-expected loss. However, Honda Motor Co., Ltd. (HMC - Free Report) , Toyota Motor Corporation (TM - Free Report) and Harley-Davidson, Inc. (HOG - Free Report) surpassed earnings estimates.
(Read the previous roundup here: Auto Stock Roundup for Jul 28, 2016)
Recap of the Week’s Most Important Stories
1. U.S. light-vehicle sales inched up 0.5% year over year to 1.52 million units in Jul 2016. Sales on a seasonally adjusted annualized rate (“SAAR”) basis increased to 17.89 million units in Jul 2016 from 17.58 million units in Jul 2015 and 16.69 million units in Jun 2016.
2. Ford posted adjusted earnings per share of 52 cents in the second quarter of 2016, 2 cents lower than the figure recorded in second-quarter 2015 (excluding special items). Moreover, earnings per share missed the Zacks Consensus Estimate of 60 cents. Revenues in the reported quarter increased to $39.5 billion from $37.3 billion in the year-ago quarter. Also, the figure outpaced the Zacks Consensus Estimate of $36.62 billion. Ford reaffirmed its guidance for 2016 (read more: Ford's Q2 Earnings Miss Estimates, View Reaffirmed).
3. Tesla incurred adjusted loss (excluding one-time items other than stock-based compensation expense) of $1.54 per share in the second quarter of 2016, much wider than the adjusted loss of 82 cents in the year-ago quarter. Moreover, the loss was significantly wider than the Zacks Consensus Estimate of a loss of $1.16 per share. Adjusted revenues improved 31% year over year to $1.56 billion, surpassing the Zacks Consensus Estimate of $1.52 billion. The automaker is targeting 50,000 vehicle deliveries in the second half of 2016 (read more: Tesla Q2 Loss Wider than Expected, Revenues Beat).
Separately, Tesla also reached a deal to acquire SolarCity for $2.6 billion in an all-stock purchase.
4. Honda reported consolidated income of ¥174.6 billion ($1.7 billion) or ¥96.93 per share (94 cents per ADR) in the first quarter (ended Jun 30, 2016) of fiscal 2017, down 6.1% from the year-ago quarter. Earnings per share surpassed the Zacks Consensus Estimate of 71 cents.
Consolidated net sales and other operating revenues declined 6.3% year over year to ¥3.47 trillion ($33.74 billion). The figure surpassed the Zacks Consensus Estimate of $32.6 billion. The decline stemmed from unfavorable foreign currency translation effects which offset increased consolidated unit sales in automobile and motorcycle business operations. Honda reaffirmed its guidance for fiscal 2017 (read more: Honda's Q1 Earnings Beat Estimates, Decline Y/Y).
5. Toyota recorded earnings of ¥179.11 per share ($3.32 per ADR) in first-quarter (ended Jun 30, 2016) fiscal 2017 compared with ¥205.30 per share ($3.37 per ADR) in first-quarter fiscal 2016. Earnings per ADR surpassed the Zacks Consensus Estimate of $2.30. Consolidated revenues decreased 5.7% year over year to ¥6.58 trillion ($61 billion) but outpaced the Zacks Consensus Estimate of $59.22 billion.
Toyota reduced its consolidated revenue guidance to ¥26 trillion ($254.9 billion) for fiscal 2017 from the previous forecast of ¥26.5 trillion ($259.8 billion). Operating income guidance was reduced to ¥1.6 trillion ($15.7 billion) from the previous forecast of ¥1.7 trillion ($16.6 billion). Net earnings are expected at around ¥1.45 trillion ($14.2 billion) instead of ¥1.5 trillion ($14.7 billion) guided previously (read more: Toyota Beats Earnings and Revenue Estimates in Q1).
6. Harley-Davidson reported earnings of $1.55 per share in the second quarter of 2016, which were higher than $1.44 recorded in the year-ago quarter. Further, earnings surpassed the Zacks Consensus Estimate of $1.53. Revenues from Motorcycles and Related Products improved to $1.67 billion from $1.65 billion in the year-ago quarter. Further, the figure was in line with the Zacks Consensus Estimate. The improvement was driven by higher motorcycle shipments.
Harley-Davidson cut its guidance for motorcycle shipments in 2016 to 264,000–269,000 units from the prior range of 269,000–274,000 units. This implies that the year-over-year change in shipments will vary between a decline of 1% and a rise of 1%. The trimmed guidance is due to softness in the U.S. market, high competition and global economic uncertainty. The company also reduced its guidance for operating margin from the Motorcycle segment to 15–16% from the prior range of 16–17% (read more: Harley-Davidson Q2 Earnings Beat, Revenues in Line).
Performance
Auto sector companies had mixed fortunes on the stock market last week. Honda gained the most, while Ford was the biggest loser among the stocks listed below.
Over the last six months also Tesla outperformed the others with a 28.8% gain. Toyota was the only stock to lose value over the longer term.
Company | Last 1-Week Period | Last 6 Months |
GM | -5.6% | +5.6% |
F | -12.4% | +5.2% |
TSLA | -1.2% | +28.8% |
TM | -0.5% | -3.7% |
HMC | +4.3% | +5.9% |
HOG | +2.1% | +25.2% |
AAP | +2.4% | +14.1% |
AZO | +1.8% | +7.6% |
What’s Next in the Auto Space?
With most major earnings already reported, only a handful of releases are yet to come. Of these, Advance Auto Parts Inc. (AAP - Free Report) will report on Aug 16, while Tata Motors Limited may report any time this month.
A few automakers may also report their China and Europe sales figures for July over the coming week.
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 >>
Earnings and U.S. sales data dominated the headlines in the auto sector last week. While Ford Motor Co. (F - Free Report) missed earnings estimates, Tesla Motors, Inc. (TSLA - Free Report) posted a wider-than-expected loss. However, Honda Motor Co., Ltd. (HMC - Free Report) , Toyota Motor Corporation (TM - Free Report) and Harley-Davidson, Inc. (HOG - Free Report) surpassed earnings estimates.
(Read the previous roundup here: Auto Stock Roundup for Jul 28, 2016)
Recap of the Week’s Most Important Stories
1. U.S. light-vehicle sales inched up 0.5% year over year to 1.52 million units in Jul 2016. Sales on a seasonally adjusted annualized rate (“SAAR”) basis increased to 17.89 million units in Jul 2016 from 17.58 million units in Jul 2015 and 16.69 million units in Jun 2016.
2. Ford posted adjusted earnings per share of 52 cents in the second quarter of 2016, 2 cents lower than the figure recorded in second-quarter 2015 (excluding special items). Moreover, earnings per share missed the Zacks Consensus Estimate of 60 cents. Revenues in the reported quarter increased to $39.5 billion from $37.3 billion in the year-ago quarter. Also, the figure outpaced the Zacks Consensus Estimate of $36.62 billion. Ford reaffirmed its guidance for 2016 (read more: Ford's Q2 Earnings Miss Estimates, View Reaffirmed).
3. Tesla incurred adjusted loss (excluding one-time items other than stock-based compensation expense) of $1.54 per share in the second quarter of 2016, much wider than the adjusted loss of 82 cents in the year-ago quarter. Moreover, the loss was significantly wider than the Zacks Consensus Estimate of a loss of $1.16 per share. Adjusted revenues improved 31% year over year to $1.56 billion, surpassing the Zacks Consensus Estimate of $1.52 billion. The automaker is targeting 50,000 vehicle deliveries in the second half of 2016 (read more: Tesla Q2 Loss Wider than Expected, Revenues Beat).
Separately, Tesla also reached a deal to acquire SolarCity for $2.6 billion in an all-stock purchase.
4. Honda reported consolidated income of ¥174.6 billion ($1.7 billion) or ¥96.93 per share (94 cents per ADR) in the first quarter (ended Jun 30, 2016) of fiscal 2017, down 6.1% from the year-ago quarter. Earnings per share surpassed the Zacks Consensus Estimate of 71 cents.
Consolidated net sales and other operating revenues declined 6.3% year over year to ¥3.47 trillion ($33.74 billion). The figure surpassed the Zacks Consensus Estimate of $32.6 billion. The decline stemmed from unfavorable foreign currency translation effects which offset increased consolidated unit sales in automobile and motorcycle business operations. Honda reaffirmed its guidance for fiscal 2017 (read more: Honda's Q1 Earnings Beat Estimates, Decline Y/Y).
5. Toyota recorded earnings of ¥179.11 per share ($3.32 per ADR) in first-quarter (ended Jun 30, 2016) fiscal 2017 compared with ¥205.30 per share ($3.37 per ADR) in first-quarter fiscal 2016. Earnings per ADR surpassed the Zacks Consensus Estimate of $2.30. Consolidated revenues decreased 5.7% year over year to ¥6.58 trillion ($61 billion) but outpaced the Zacks Consensus Estimate of $59.22 billion.
Toyota reduced its consolidated revenue guidance to ¥26 trillion ($254.9 billion) for fiscal 2017 from the previous forecast of ¥26.5 trillion ($259.8 billion). Operating income guidance was reduced to ¥1.6 trillion ($15.7 billion) from the previous forecast of ¥1.7 trillion ($16.6 billion). Net earnings are expected at around ¥1.45 trillion ($14.2 billion) instead of ¥1.5 trillion ($14.7 billion) guided previously (read more: Toyota Beats Earnings and Revenue Estimates in Q1).
6. Harley-Davidson reported earnings of $1.55 per share in the second quarter of 2016, which were higher than $1.44 recorded in the year-ago quarter. Further, earnings surpassed the Zacks Consensus Estimate of $1.53. Revenues from Motorcycles and Related Products improved to $1.67 billion from $1.65 billion in the year-ago quarter. Further, the figure was in line with the Zacks Consensus Estimate. The improvement was driven by higher motorcycle shipments.
Harley-Davidson cut its guidance for motorcycle shipments in 2016 to 264,000–269,000 units from the prior range of 269,000–274,000 units. This implies that the year-over-year change in shipments will vary between a decline of 1% and a rise of 1%. The trimmed guidance is due to softness in the U.S. market, high competition and global economic uncertainty. The company also reduced its guidance for operating margin from the Motorcycle segment to 15–16% from the prior range of 16–17% (read more: Harley-Davidson Q2 Earnings Beat, Revenues in Line).
Performance
Auto sector companies had mixed fortunes on the stock market last week. Honda gained the most, while Ford was the biggest loser among the stocks listed below.
Over the last six months also Tesla outperformed the others with a 28.8% gain. Toyota was the only stock to lose value over the longer term.
Company
Last 1-Week Period
Last 6 Months
GM
-5.6%
+5.6%
F
-12.4%
+5.2%
TSLA
-1.2%
+28.8%
TM
-0.5%
-3.7%
HMC
+4.3%
+5.9%
HOG
+2.1%
+25.2%
AAP
+2.4%
+14.1%
AZO
+1.8%
+7.6%
What’s Next in the Auto Space?
With most major earnings already reported, only a handful of releases are yet to come. Of these, Advance Auto Parts Inc. (AAP - Free Report) will report on Aug 16, while Tata Motors Limited may report any time this month.
A few automakers may also report their China and Europe sales figures for July over the coming week.
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 >>
Get the latest research report on F - FREE
Get the latest research report on TM - FREE
Get the latest research report on HOG - FREE
Get the latest research report on HMC - FREE
Get the latest research report on AAP - FREE
Get the latest research report on TSLA - FREE