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Auto Roundup: LAD, PAG, GPI, ORLY and HOG Beat Q4 Earnings Estimates
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The fourth-quarter 2021 earnings season for the Auto sector is in full swing, with a host of companies having reported results last week. Robust vehicle demand amid preference for personal mobility coupled with rising average prices of new and used vehicles aided fourth-quarter results of the auto retailers that reported during the week gone by. Prominent auto retailers including Lithia Motors (LAD - Free Report) , Penske Automotive (PAG - Free Report) , O’Reilly Automotive (ORLY - Free Report) , and Group 1 Automotive (GPI - Free Report) not only surpassed earnings estimates but also witnessed a year-over-year increase in fourth-quarter profits and revenues. Iconic motorcycle maker Harley-Davidson (HOG - Free Report) also managed to put up an impressive fourth-quarter 2021 show despite chip crunch-related headwinds.
Read on to know about the key takeaways from the major earnings releases of last week.
1. O’Reilly reported fourth-quarter 2021 adjusted earnings per share of $7.64, surpassing the Zacks Consensus Estimate of $6, led by growth in comparable store sales. Comps grew 14.5% year over year for the quarter, topping the Zacks Consensus Estimate of comps growth of 4.83%. The bottom line also increased from $5.40 a share recorded in the prior-year quarter. Quarterly revenues of $3,291.5 million surpassed the consensus mark of $3,066.7 million. The top line was also 16.36% higher than the prior-year figure of $2,828.8 million.
ORLY projects total revenues within $14.2-$14.5 billion. Earnings per share are envisioned in the band of $32.35-$32.85. It forecasts comparable store sales growth within 5-7%. It envisions free cash flow in the band of $1.3-$1.6 billion and capital expenditure within $650-$750 million. (O'Reilly's Q4 Earnings Top Estimates on Comps Growth)
2. Group 1 reported fourth-quarter 2021 adjusted earnings per share of $9.43, beating the Zacks Consensus Estimate of $9.06. The outperformance can be attributed to higher-than-anticipated gross profit from the company’s new-vehicle retail and used-vehicle retail segments. The bottom line increased from the prior-year quarter’s $5.66 per share, marking growth of 66.6%. The automotive retailer registered net sales of $3,489.6 million, marginally beating the Zacks Consensus Estimate of $3,478.8 million. Also, the top line rose 16.7% from the year-ago quarter’s $2,990.2 million.
Group 1 Automotive had cash and cash equivalents of $14.9 million as of Dec 31, 2021, down from $69 million in the corresponding period of 2020. Total debt totaled $2,035.7 million as of Dec 31, 2021, significantly up from the $1,336.6 million recorded in the comparable period of 2020. (Group 1 Earnings Top Estimates in Q4, Sales Rise Y/Y)
3. Penske reported fourth-quarter 2021 adjusted earnings of $4.10 per share, increasing 65% year over year and surpassing the Zacks Consensus Estimate of $3.67. Higher-than-expected gross profit in the Retail Commercial Truck and Commercial Vehicles Australia/Power Systems segments resulted in this outperformance. The auto retailer registered net sales of $6,296.1 million, outpacing the Zacks Consensus Estimate of $6,227.5 million. The top line also rose 8.3% from the comparable year-ago period.
For the quarter under review, SG&A costs totaled $791.1 million, up 26.4% year over year. Penske had cash and cash equivalents of $100.7 million as of Dec 31, 2021, up from $49.5 million at 2020-end. Long-term debt amounted to $1,392 million, down from $1,602.1 million as of Dec 31, 2020. (Penske'sEarnings Beat Estimates in Q4, Sales Rise Y/Y)
4. Lithia reported fourth-quarter adjusted earnings of $11.39 per share, reflecting a whopping 109% increase from the prior-year quarter’s $5.46. The figure also beat the Zacks Consensus Estimate of $9.99. Higher-than-expected revenues from new vehicle, used-vehicle (retail and wholesale), and fleet and others segments led to this outperformance. Total revenues jumped 60.1% year over year to $6,309.5 million but missed the Zacks Consensus Estimate of $6,318.4 million.
LAD claims to have reported the highest fourth-quarter earnings and revenues in its history. Lithia had cash and cash equivalents of $174.8 million as of Dec 31, 2021. Long-term debt was $3,185.7 million, marking a 54.3% increase from $2,064.7 million as of Dec 31, 2020. (Lithia's Q4 Earnings Surpass Estimates, Sales Miss)
5. Harley-Davidson reported fourth-quarter 2021 adjusted earnings of 14 cents per share against the Zacks Consensus Estimate of a loss of 41 cents. Higher-than-anticipated revenues from both Motorcycles & Related Products and Financial Services segments resulted in this outperformance. The bottom line also compared favorably with the loss of 63 cents per share reported in the year-ago quarter. The company generated consolidated revenues (including motorcycle sales and financial services revenues) of $1,016 million, up 40% from the year-earlier quarter.
HOG expects revenues from the motorcycles segment to grow in the band of 5-10% in the current year. It expects operating income margin of 11-12% in 2022. The firm had cash and cash equivalents of $1,874.7 million as of Dec 31, 2021, significantly down from the $3,257.2 million recorded at 2020-end. Long-term debt decreased to $4,595.6 million from $5,932.9 million recorded as of Dec 31, 2020. (Harley Davidson Q4 Earnings Beat Estimates, Improve Y/Y)
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
What’s Next in the Auto Space?
Industry watchers will track China vehicle sales data for January 2022, which is likely to be released by the China Association of Automobile Manufacturers soon. Also, stay tuned for quarterly results of a host of auto companies, including a few S&P sector components, that are slated to be reported this week.
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Auto Roundup: LAD, PAG, GPI, ORLY and HOG Beat Q4 Earnings Estimates
The fourth-quarter 2021 earnings season for the Auto sector is in full swing, with a host of companies having reported results last week. Robust vehicle demand amid preference for personal mobility coupled with rising average prices of new and used vehicles aided fourth-quarter results of the auto retailers that reported during the week gone by. Prominent auto retailers including Lithia Motors (LAD - Free Report) , Penske Automotive (PAG - Free Report) , O’Reilly Automotive (ORLY - Free Report) , and Group 1 Automotive (GPI - Free Report) not only surpassed earnings estimates but also witnessed a year-over-year increase in fourth-quarter profits and revenues. Iconic motorcycle maker Harley-Davidson (HOG - Free Report) also managed to put up an impressive fourth-quarter 2021 show despite chip crunch-related headwinds.
Read on to know about the key takeaways from the major earnings releases of last week.
1. O’Reilly reported fourth-quarter 2021 adjusted earnings per share of $7.64, surpassing the Zacks Consensus Estimate of $6, led by growth in comparable store sales. Comps grew 14.5% year over year for the quarter, topping the Zacks Consensus Estimate of comps growth of 4.83%. The bottom line also increased from $5.40 a share recorded in the prior-year quarter. Quarterly revenues of $3,291.5 million surpassed the consensus mark of $3,066.7 million. The top line was also 16.36% higher than the prior-year figure of $2,828.8 million.
ORLY projects total revenues within $14.2-$14.5 billion. Earnings per share are envisioned in the band of $32.35-$32.85. It forecasts comparable store sales growth within 5-7%. It envisions free cash flow in the band of $1.3-$1.6 billion and capital expenditure within $650-$750 million. (O'Reilly's Q4 Earnings Top Estimates on Comps Growth)
2. Group 1 reported fourth-quarter 2021 adjusted earnings per share of $9.43, beating the Zacks Consensus Estimate of $9.06. The outperformance can be attributed to higher-than-anticipated gross profit from the company’s new-vehicle retail and used-vehicle retail segments. The bottom line increased from the prior-year quarter’s $5.66 per share, marking growth of 66.6%. The automotive retailer registered net sales of $3,489.6 million, marginally beating the Zacks Consensus Estimate of $3,478.8 million. Also, the top line rose 16.7% from the year-ago quarter’s $2,990.2 million.
Group 1 Automotive had cash and cash equivalents of $14.9 million as of Dec 31, 2021, down from $69 million in the corresponding period of 2020. Total debt totaled $2,035.7 million as of Dec 31, 2021, significantly up from the $1,336.6 million recorded in the comparable period of 2020. (Group 1 Earnings Top Estimates in Q4, Sales Rise Y/Y)
3. Penske reported fourth-quarter 2021 adjusted earnings of $4.10 per share, increasing 65% year over year and surpassing the Zacks Consensus Estimate of $3.67. Higher-than-expected gross profit in the Retail Commercial Truck and Commercial Vehicles Australia/Power Systems segments resulted in this outperformance. The auto retailer registered net sales of $6,296.1 million, outpacing the Zacks Consensus Estimate of $6,227.5 million. The top line also rose 8.3% from the comparable year-ago period.
For the quarter under review, SG&A costs totaled $791.1 million, up 26.4% year over year. Penske had cash and cash equivalents of $100.7 million as of Dec 31, 2021, up from $49.5 million at 2020-end. Long-term debt amounted to $1,392 million, down from $1,602.1 million as of Dec 31, 2020. (Penske'sEarnings Beat Estimates in Q4, Sales Rise Y/Y)
4. Lithia reported fourth-quarter adjusted earnings of $11.39 per share, reflecting a whopping 109% increase from the prior-year quarter’s $5.46. The figure also beat the Zacks Consensus Estimate of $9.99. Higher-than-expected revenues from new vehicle, used-vehicle (retail and wholesale), and fleet and others segments led to this outperformance. Total revenues jumped 60.1% year over year to $6,309.5 million but missed the Zacks Consensus Estimate of $6,318.4 million.
LAD claims to have reported the highest fourth-quarter earnings and revenues in its history. Lithia had cash and cash equivalents of $174.8 million as of Dec 31, 2021. Long-term debt was $3,185.7 million, marking a 54.3% increase from $2,064.7 million as of Dec 31, 2020. (Lithia's Q4 Earnings Surpass Estimates, Sales Miss)
5. Harley-Davidson reported fourth-quarter 2021 adjusted earnings of 14 cents per share against the Zacks Consensus Estimate of a loss of 41 cents. Higher-than-anticipated revenues from both Motorcycles & Related Products and Financial Services segments resulted in this outperformance. The bottom line also compared favorably with the loss of 63 cents per share reported in the year-ago quarter. The company generated consolidated revenues (including motorcycle sales and financial services revenues) of $1,016 million, up 40% from the year-earlier quarter.
HOG expects revenues from the motorcycles segment to grow in the band of 5-10% in the current year. It expects operating income margin of 11-12% in 2022. The firm had cash and cash equivalents of $1,874.7 million as of Dec 31, 2021, significantly down from the $3,257.2 million recorded at 2020-end. Long-term debt decreased to $4,595.6 million from $5,932.9 million recorded as of Dec 31, 2020. (Harley Davidson Q4 Earnings Beat Estimates, Improve Y/Y)
Price Performance
The following table shows the price movement of some of the major auto players over the past week and six-month period.
What’s Next in the Auto Space?
Industry watchers will track China vehicle sales data for January 2022, which is likely to be released by the China Association of Automobile Manufacturers soon. Also, stay tuned for quarterly results of a host of auto companies, including a few S&P sector components, that are slated to be reported this week.