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Auto Stock Roundup: GM, TM & HMC Post Impressive Quarterly Results
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Last week, China Association of Automobile Manufacturers (CAAM) unveiled vehicle sales data for January 2021. Auto sales in the country rose around 30% year over year to 2.5 million units for September 2020, marking the 10thstraight month of year-over-year growth.Sales of new energy vehicles skyrocketed 238.5% year over year to 179,000 units in the first month of this year.
On the news front, auto equipment supplier Allison Transmission announced an 11.7% hike in its quarterly dividend. Noted automotive retailer Lithia Motors (LAD - Free Report) announced the acquisition of two dealerships in Florida from Fields Auto Group, which is likely to add $200 million to its annualized revenues. Meanwhile, the electric vehicle behemoth Tesla (TSLA - Free Report) is set to recall 12,300 Model X vehicles, built between 2015 and 2016, to fix trim adhesive issues. U.S. auto giant General Motors (GM - Free Report) announced that it will be extending downtime at production plants in Kansas, Canada and Mexico through mid-March amid excessive shortage of semiconductor supply.
Below we shall highlight the earnings results of auto bigwigs that reported quarterly figures last week.
Earnings Flashback
For the week ended Feb 12, three S&P 500 auto stocks including GeneralMotors, O’Reilly Automotive (ORLY - Free Report) and BorgWarner (BWA - Free Report) reported quarterly results. All the three firms put up a stellar show for fourth-quarter 2020 with earnings and sales not just topping estimates but also rising year over year. Also, Japanese auto biggies Honda (HMC - Free Report) and Toyota (TM - Free Report) posted impressive third-quarter fiscal 2021 results. Notably, both companies raised their fiscal 2021 operating income projection.
1. General Motors reported adjusted earnings of $1.93 per share for fourth-quarter 2020, surpassing the Zacks Consensus Estimate of $1.62. The bottom line was also significantly higher than the year-ago earnings of 5 cents per share amid cost-containment efforts and robust demand for SUVs as well as pickups.Revenues of $37,518 million topped the Zacks Consensus Estimate of $36,899 million and also rose 21.7% year over year. The company expects 2021 adjusted EBIT and EPS per share in the band of $10-$11 billion and $4.5-$5.25, respectively. Adjusted automotive FCF is envisioned between $1 billion and $2 billion.
2. Toyota posted third-quarter fiscal 2021 earnings of $5.67 per share, which comprehensively surpassed the Zacks Consensus Estimate of $3.65 and also compared favorably with the year-ago earnings of $4.79.Consolidated revenues came in at $78,044.7 million, also beating the consensus mark of $73,567.5 million. The top-line figure climbed 7.11% year over year as well. This presently Zacks Rank #1 (Strong Buy) company projects consolidated vehicle sales of 7.6 million units, up from the prior forecast of 7.5 million units. Sales are expected to total ¥26.5 trillion, up from the previous guidance of ¥26 trillion. Operating income is now projected at ¥2,000 billion, indicating an increase from the prior estimate of ¥1,300 billion.You can see the complete list of today’s Zacks #1 Rank stocks here.
3. Honda reported earnings of $1.58 per ADR for third-quarter fiscal 2021, surpassing the Zacks Consensus Estimate of 75 cents as well as outpacing the year-ago earnings of 61 cents. Further, quarterly revenues totaled $36,116.6 million, exceeding the Zacks Consensus Estimate of $35,268 million. Moreover, the top line inched up 0.6% year on year. For fiscal 2021, Honda forecasts sales of ¥12.95 trillion, down from the prior estimate of ¥13.05 trillion. Nevertheless, the company projects an operating profit of ¥520 billion, up from the previous estimate of ¥420 billion. Total annual dividend per share to be paid out for fiscal 2021 is expected to be ¥82, above the previous estimate of ¥68.
4. O’Reilly reported fourth-quarter 2020 earnings per share of $5.40, surpassing the Zacks Consensus Estimate of $5.12.Remarkable comparable store sales growth drove this outperformance. Precisely, comps growth of 11.2% compares favorably with the prior-year period’s 4.4%.The bottom line also climbed27% year on year. Quarterly revenues of $2,828.8 million too topped the consensus mark of $2,760 million and were higher than the prior-year level of $2,482.9 million as well.For 2021, O’Reilly projects total revenues of $11.5-$11.8 billion and earnings per share of $22.7-$22.9. The company expects comparable store sales to decline up to 2% in 2021. It envisions free cash flow in the band of $1-$1.3 billion.
5. BorgWarner reported adjusted earnings of $1.18 per share for fourth-quarter 2020, significantly surpassing the Zacks Consensus Estimate of 88 cents. The bottom line also improved from the year-ago figure of $1.17 per share. This automotive equipment supplier reported net sales worth$3,926 million, outshining the Zacks Consensus Estimate of $3,618 million and also surging 53.4% year over year. For 2021, BorgWarner anticipates net sales within $14.7-$15.3 billion, indicating an increase of 12-17% from the pro-forma combined sales of $12.8 billion recorded in 2020. Adjusted operating margin and net earnings are expected in the band of 10-10.5% and $3.23-$3.377 per share, respectively. Free cash flow is projected between $800 million and $900 million.
Price Performance
The following table shows the stock movement of a few major auto players over the past week and in the past six-month period.
In the past six months, all stocks have increased barring Advance Auto Parts and AutoZone, both of which have declined 5.1%. Last week’s show was a mixed bag with Toyota witnessing the maximum gain and AutoZone losing the most.
What’s Next in the Auto Space?
Investors await the quarterly releases of S&P 500 auto replacement parts suppliers, namely Genuine Parts and LKQ Corp. Others auto firms like Magna International, Sonic Automotive, etc are also scheduled to report quarterly results during the ongoing week.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Auto Stock Roundup: GM, TM & HMC Post Impressive Quarterly Results
Last week, China Association of Automobile Manufacturers (CAAM) unveiled vehicle sales data for January 2021. Auto sales in the country rose around 30% year over year to 2.5 million units for September 2020, marking the 10thstraight month of year-over-year growth.Sales of new energy vehicles skyrocketed 238.5% year over year to 179,000 units in the first month of this year.
On the news front, auto equipment supplier Allison Transmission announced an 11.7% hike in its quarterly dividend. Noted automotive retailer Lithia Motors (LAD - Free Report) announced the acquisition of two dealerships in Florida from Fields Auto Group, which is likely to add $200 million to its annualized revenues. Meanwhile, the electric vehicle behemoth Tesla (TSLA - Free Report) is set to recall 12,300 Model X vehicles, built between 2015 and 2016, to fix trim adhesive issues. U.S. auto giant General Motors (GM - Free Report) announced that it will be extending downtime at production plants in Kansas, Canada and Mexico through mid-March amid excessive shortage of semiconductor supply.
Below we shall highlight the earnings results of auto bigwigs that reported quarterly figures last week.
Earnings Flashback
For the week ended Feb 12, three S&P 500 auto stocks including GeneralMotors, O’Reilly Automotive (ORLY - Free Report) and BorgWarner (BWA - Free Report) reported quarterly results. All the three firms put up a stellar show for fourth-quarter 2020 with earnings and sales not just topping estimates but also rising year over year. Also, Japanese auto biggies Honda (HMC - Free Report) and Toyota (TM - Free Report) posted impressive third-quarter fiscal 2021 results. Notably, both companies raised their fiscal 2021 operating income projection.
1. General Motors reported adjusted earnings of $1.93 per share for fourth-quarter 2020, surpassing the Zacks Consensus Estimate of $1.62. The bottom line was also significantly higher than the year-ago earnings of 5 cents per share amid cost-containment efforts and robust demand for SUVs as well as pickups.Revenues of $37,518 million topped the Zacks Consensus Estimate of $36,899 million and also rose 21.7% year over year. The company expects 2021 adjusted EBIT and EPS per share in the band of $10-$11 billion and $4.5-$5.25, respectively. Adjusted automotive FCF is envisioned between $1 billion and $2 billion.
2. Toyota posted third-quarter fiscal 2021 earnings of $5.67 per share, which comprehensively surpassed the Zacks Consensus Estimate of $3.65 and also compared favorably with the year-ago earnings of $4.79.Consolidated revenues came in at $78,044.7 million, also beating the consensus mark of $73,567.5 million. The top-line figure climbed 7.11% year over year as well. This presently Zacks Rank #1 (Strong Buy) company projects consolidated vehicle sales of 7.6 million units, up from the prior forecast of 7.5 million units. Sales are expected to total ¥26.5 trillion, up from the previous guidance of ¥26 trillion. Operating income is now projected at ¥2,000 billion, indicating an increase from the prior estimate of ¥1,300 billion.You can see the complete list of today’s Zacks #1 Rank stocks here.
3. Honda reported earnings of $1.58 per ADR for third-quarter fiscal 2021, surpassing the Zacks Consensus Estimate of 75 cents as well as outpacing the year-ago earnings of 61 cents. Further, quarterly revenues totaled $36,116.6 million, exceeding the Zacks Consensus Estimate of $35,268 million. Moreover, the top line inched up 0.6% year on year. For fiscal 2021, Honda forecasts sales of ¥12.95 trillion, down from the prior estimate of ¥13.05 trillion. Nevertheless, the company projects an operating profit of ¥520 billion, up from the previous estimate of ¥420 billion. Total annual dividend per share to be paid out for fiscal 2021 is expected to be ¥82, above the previous estimate of ¥68.
4. O’Reilly reported fourth-quarter 2020 earnings per share of $5.40, surpassing the Zacks Consensus Estimate of $5.12.Remarkable comparable store sales growth drove this outperformance. Precisely, comps growth of 11.2% compares favorably with the prior-year period’s 4.4%.The bottom line also climbed27% year on year. Quarterly revenues of $2,828.8 million too topped the consensus mark of $2,760 million and were higher than the prior-year level of $2,482.9 million as well.For 2021, O’Reilly projects total revenues of $11.5-$11.8 billion and earnings per share of $22.7-$22.9. The company expects comparable store sales to decline up to 2% in 2021. It envisions free cash flow in the band of $1-$1.3 billion.
5. BorgWarner reported adjusted earnings of $1.18 per share for fourth-quarter 2020, significantly surpassing the Zacks Consensus Estimate of 88 cents. The bottom line also improved from the year-ago figure of $1.17 per share. This automotive equipment supplier reported net sales worth$3,926 million, outshining the Zacks Consensus Estimate of $3,618 million and also surging 53.4% year over year. For 2021, BorgWarner anticipates net sales within $14.7-$15.3 billion, indicating an increase of 12-17% from the pro-forma combined sales of $12.8 billion recorded in 2020. Adjusted operating margin and net earnings are expected in the band of 10-10.5% and $3.23-$3.377 per share, respectively. Free cash flow is projected between $800 million and $900 million.
Price Performance
The following table shows the stock movement of a few major auto players over the past week and in the past six-month period.
In the past six months, all stocks have increased barring Advance Auto Parts and AutoZone, both of which have declined 5.1%. Last week’s show was a mixed bag with Toyota witnessing the maximum gain and AutoZone losing the most.
What’s Next in the Auto Space?
Investors await the quarterly releases of S&P 500 auto replacement parts suppliers, namely Genuine Parts and LKQ Corp. Others auto firms like Magna International, Sonic Automotive, etc are also scheduled to report quarterly results during the ongoing week.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>