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Auto Stock Roundup: NIO's Narrower Q2 Loss, LEA's Payout Hike & More
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July auto sales data for China — the world’s largest car market — was released last week. Per the China Association of Automobile Manufacturers, vehicle sales in the country declined 11.9% year over year to 1.86 million units, tumbling for the third consecutive month. COVID-19 outbreak in China and global shortfall of semiconductor supply resulted in the decline. While chip crunch and manufacturing delays hit automakers, electric vehicles managed to sustain the momentum, with sales of new energy vehicles more than doubling year over year to 271,000 units in July.
Last Week’s Top Stories
Lear Corporation (LEA - Free Report) cheered investors with the announcement of a payout hike. The board raised quarterly dividend payment form 25 cents per share to 50 cents, payable on Sep 21, to shareholders on record as of Sep 2. The move indicates the company’s commitment to deliver long-term shareholder value, and reflects its stable financial position and ability to generate sufficient cash flows. Free cash flow in the last reported quarter came in at $120.1 million versus negative $610.6 million recorded in the corresponding period of 2020.
NIO Inc. (NIO - Free Report) reported second-quarter 2021 loss per American Depositary Share of 7 cents, narrower than the year-ago loss of 16 cents owing to higher revenues. The China-based electric vehicle maker posted revenues of $1,308.4 million, up a whopping 127.2% year over year, thanks to robust deliveries. The firm expects third-quarter 2021 deliveries in the band of 23,000-25,000 vehicles, signaling an uptick in the range of 88.4-104.8%. Revenues are envisioned between $1,380.4 million and $1,491.7 million, indicating a year-over-year jump of 96.9-112.8%.
Carvana (CVNA - Free Report) entered into a partnership with Root Inc, per which the former will invest $126 million in the insurer tech company. The alliance will enable integration of Root’s auto insurance products into the used-car e-retailer’s car buying platform. Quoting Carvana’s CEO Ernie Garcia, “This integrated solution will give Root exclusive access to a scaled and growing channel of prospective customers at the important insurance decision point of buying a car, which positions us to deliver on an immediate customer need and drive sustainable policyholder growth.”
Lithia Motors (LAD - Free Report) announced that it processed 800 transactions in the month of July, reflecting a 45% jump from June and an increase from mid-year projection. The company further expanded in the United States with the acquisition of Grapevine Honda in the Dallas/Fort Worth market and the Kia dealership in Frisco. With these recent buyouts, Lithia’s network in Texas has expanded to 32 stores. The company has achieved $4.8 billion in annualized revenues via acquisitions in 2021, attaining 41% of its targeted network expansion goal under the five-year plan.
Ford (F - Free Report) has delayed deliveries for its highly popular Mustang Mach-E amid the shortage of microchips. Those who were scheduled to get their vehicles delivered between Jul 5 and Oct 1 will now have to brace for a delay of minimum six weeks to get their hands on Mustang Mach E. In what might assuage the extended waiting period for customers to some extent, the U.S. auto giant will be providing owners with an additional 250 kilowatt per hour of complimentary charging — in its FordPass Charging Network — on top of the 250kwh that customers will be anyway receiving on purchase of the vehicle.
Price Performance
The following table shows the price movement of some of the major auto players over the past week and six-month period.
Image Source: Zacks Investment Research
In the past six months, all stocks have increased, apart from Tesla (TSLA - Free Report) . A mixed price trend has been displayed in the past week, with Harley-Davidson registering the maximum gain and General Motors losing the most.
What’s Next in the Auto Space?
Industry watchers will track the passenger car registrations data in European Union for July 2021, which is likely to be released by European Automobile Manufacturers Association later this week. Meanwhile, all eyes will be glued on the Tesla AI Day, which is scheduled for Aug 19. Also, stay tuned for coronavirus and chip crunch-related disruptions in the auto sector.
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Auto Stock Roundup: NIO's Narrower Q2 Loss, LEA's Payout Hike & More
July auto sales data for China — the world’s largest car market — was released last week. Per the China Association of Automobile Manufacturers, vehicle sales in the country declined 11.9% year over year to 1.86 million units, tumbling for the third consecutive month. COVID-19 outbreak in China and global shortfall of semiconductor supply resulted in the decline. While chip crunch and manufacturing delays hit automakers, electric vehicles managed to sustain the momentum, with sales of new energy vehicles more than doubling year over year to 271,000 units in July.
Last Week’s Top Stories
Lear Corporation (LEA - Free Report) cheered investors with the announcement of a payout hike. The board raised quarterly dividend payment form 25 cents per share to 50 cents, payable on Sep 21, to shareholders on record as of Sep 2. The move indicates the company’s commitment to deliver long-term shareholder value, and reflects its stable financial position and ability to generate sufficient cash flows. Free cash flow in the last reported quarter came in at $120.1 million versus negative $610.6 million recorded in the corresponding period of 2020.
NIO Inc. (NIO - Free Report) reported second-quarter 2021 loss per American Depositary Share of 7 cents, narrower than the year-ago loss of 16 cents owing to higher revenues. The China-based electric vehicle maker posted revenues of $1,308.4 million, up a whopping 127.2% year over year, thanks to robust deliveries. The firm expects third-quarter 2021 deliveries in the band of 23,000-25,000 vehicles, signaling an uptick in the range of 88.4-104.8%. Revenues are envisioned between $1,380.4 million and $1,491.7 million, indicating a year-over-year jump of 96.9-112.8%.
Carvana (CVNA - Free Report) entered into a partnership with Root Inc, per which the former will invest $126 million in the insurer tech company. The alliance will enable integration of Root’s auto insurance products into the used-car e-retailer’s car buying platform. Quoting Carvana’s CEO Ernie Garcia, “This integrated solution will give Root exclusive access to a scaled and growing channel of prospective customers at the important insurance decision point of buying a car, which positions us to deliver on an immediate customer need and drive sustainable policyholder growth.”
Lithia Motors (LAD - Free Report) announced that it processed 800 transactions in the month of July, reflecting a 45% jump from June and an increase from mid-year projection. The company further expanded in the United States with the acquisition of Grapevine Honda in the Dallas/Fort Worth market and the Kia dealership in Frisco. With these recent buyouts, Lithia’s network in Texas has expanded to 32 stores. The company has achieved $4.8 billion in annualized revenues via acquisitions in 2021, attaining 41% of its targeted network expansion goal under the five-year plan.
Ford (F - Free Report) has delayed deliveries for its highly popular Mustang Mach-E amid the shortage of microchips. Those who were scheduled to get their vehicles delivered between Jul 5 and Oct 1 will now have to brace for a delay of minimum six weeks to get their hands on Mustang Mach E. In what might assuage the extended waiting period for customers to some extent, the U.S. auto giant will be providing owners with an additional 250 kilowatt per hour of complimentary charging — in its FordPass Charging Network — on top of the 250kwh that customers will be anyway receiving on purchase of the vehicle.
Price Performance
The following table shows the price movement of some of the major auto players over the past week and six-month period.
Image Source: Zacks Investment Research
In the past six months, all stocks have increased, apart from Tesla (TSLA - Free Report) . A mixed price trend has been displayed in the past week, with Harley-Davidson registering the maximum gain and General Motors losing the most.
What’s Next in the Auto Space?
Industry watchers will track the passenger car registrations data in European Union for July 2021, which is likely to be released by European Automobile Manufacturers Association later this week. Meanwhile, all eyes will be glued on the Tesla AI Day, which is scheduled for Aug 19. Also, stay tuned for coronavirus and chip crunch-related disruptions in the auto sector.