The auto sector’s performance has been below par so far in the Q4 earnings season. As of Feb 3, nearly 40% of the sector’s companies had reported results. These companies recorded 33.8% year-over-year fall in earnings and 3.9% decline in revenues, per our latest Earnings Preview. In comparison, the 275 S&P 500 companies that had reported through Feb 3 posted a 6.9% growth in earnings and a 4.2% rise in revenues.
The weak performance is expected to continue till the end of this earnings season. By the end of Q4, auto sector earnings are projected to decline 25.2%, while revenues are expected to inch up 0.2%. Meanwhile, total S&P 500 earnings and revenues are expected to increase 6.8% and 3.9% year over year, respectively.
Safety recalls and related costs have turned out to be a major issue for most automakers in recent years. Recall-related repair costs have increased their financial burden. The pressure to maintain attractive incentives and deals to boost volumes is also straining their margins and bottom line. Further, the adverse impact of foreign currency translation remains a headwind for many companies.
Meanwhile, strong sales growth in the key markets of U.S., China and Europe has been the primary driving factor for the auto sector in Q4. Also, low fuel prices boosted the sales of higher margin vehicle segments, such as SUVs and light trucks. With these factors in mind, let’s see what awaits these three auto stocks that are slated to release their results on Feb 9.
BorgWarner Inc. (BWA - Free Report) has an Earnings ESP of 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 84 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company managed to beat earnings in each of the trailing four quarters, thus delivering a positive average surprise of 2.3% over this period. BorgWarner carries a Zacks Rank #4 (Sell) (read more: BorgWarner Q4 Earnings: A Disappointment in Store?).
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +0.99% because the Most Accurate estimate of $2.04 stands above the Zacks Consensus Estimate of $2.02. It posted positive earnings surprises in three of the last four quarters, with a positive average surprise of 5.13%. Cummins currently carries a Zacks Rank #3 (Hold) (read more: Cummins Likely to Beat on Q4 Earnings: Stock to Gain?)
Dana Incorporated (DAN - Free Report) currently has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 39 cents. Dana Incorporated posted positive earnings surprises in two of the trailing four quarters with an average beat of 0.06%. The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
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’s performance has been below par so far in the Q4 earnings season. As of Feb 3, nearly 40% of the sector’s companies had reported results. These companies recorded 33.8% year-over-year fall in earnings and 3.9% decline in revenues, per our latest Earnings Preview. In comparison, the 275 S&P 500 companies that had reported through Feb 3 posted a 6.9% growth in earnings and a 4.2% rise in revenues.
The weak performance is expected to continue till the end of this earnings season. By the end of Q4, auto sector earnings are projected to decline 25.2%, while revenues are expected to inch up 0.2%. Meanwhile, total S&P 500 earnings and revenues are expected to increase 6.8% and 3.9% year over year, respectively.
Safety recalls and related costs have turned out to be a major issue for most automakers in recent years. Recall-related repair costs have increased their financial burden. The pressure to maintain attractive incentives and deals to boost volumes is also straining their margins and bottom line. Further, the adverse impact of foreign currency translation remains a headwind for many companies.
Meanwhile, strong sales growth in the key markets of U.S., China and Europe has been the primary driving factor for the auto sector in Q4. Also, low fuel prices boosted the sales of higher margin vehicle segments, such as SUVs and light trucks. With these factors in mind, let’s see what awaits these three auto stocks that are slated to release their results on Feb 9.
BorgWarner Inc. (BWA - Free Report) has an Earnings ESP of 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 84 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company managed to beat earnings in each of the trailing four quarters, thus delivering a positive average surprise of 2.3% over this period. BorgWarner carries a Zacks Rank #4 (Sell) (read more: BorgWarner Q4 Earnings: A Disappointment in Store?).
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +0.99% because the Most Accurate estimate of $2.04 stands above the Zacks Consensus Estimate of $2.02. It posted positive earnings surprises in three of the last four quarters, with a positive average surprise of 5.13%. Cummins currently carries a Zacks Rank #3 (Hold) (read more: Cummins Likely to Beat on Q4 Earnings: Stock to Gain?)
Dana Incorporated (DAN - Free Report) currently has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 39 cents. Dana Incorporated posted positive earnings surprises in two of the trailing four quarters with an average beat of 0.06%. The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
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 BWA - FREE
Get the latest research report on CMI - FREE
Get the latest research report on DAN - FREE