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Auto Stock Roundup: Q4 Earnings of AAP, BWA, GPC & LKQ in Focus
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January 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 edged up 0.9% year over year to 2.53 million units, snapping eight consecutive monthly declines. Sales of new energy vehicles surged 136% year over year to 431,000 units in January.
The European Automobile Manufacturers Association (“ACEA”) also released data for passenger car registrations made in January 2022. New car registrations in Europe witnessed a year-over-year decline of 6%, marking a record low number of registrations for the month of January. Sales in four key markets — namely France, Spain, Italy and Germany — witnessed mixed results. While Italy and France saw double-digit declines of 19.7% and 18.6%, Germany and Spain recorded year-over-year growth of 8.5% and 1%, respectively.
Meanwhile, a few S&P 500 companies from the auto space including Advance Auto Parts, Inc. (AAP - Free Report) , BorgWarner Inc. (BWA - Free Report) , Genuine Parts Company (GPC - Free Report) and LKQ Corporation (LKQ - Free Report) released their quarterly reports last week. Encouragingly, each of them managed to pull off a comprehensive beat.
Earnings Snapshots of Last Week’s Key Releases
Advance Auto reported adjusted earnings of $2.07 per share for fourth-quarter 2021 (ended Jan 1, 2022), increasing 17.6% from the prior-year figure and topping the Zacks Consensus Estimate of $1.97 on higher-than-expected comps growth. Advance Auto generated net revenues of $2,397 million, topping the Zacks Consensus Estimate of $2,362 million and edging up 1.3% from the year-ago reported figure. The company also approved a 50% hike in its quarterly cash dividend.
Advance Auto estimates 2022 net sales in the band of $11.2-$11.5 billion. Comparable store sales growth and adjusted operating income margin are envisioned in the range of 1-3% and 10-10.2%, respectively. Advance Auto expects capex in the $300-$350 million range and targets free cash flow of a minimum of $775 million. (Advance Auto Beats Q4 Earnings Estimates, Hikes Payout)
BorgWarner reported adjusted earnings of $1.06 per share for fourth-quarter 2021, declining from $1.18 recorded in the prior-year period but beating the Zacks Consensus Estimate of 74 cents. The automotive equipment supplier reported net sales of $3,655 million, outpacing the Zacks Consensus Estimate of $3,462 million. The top-line figure, however, declined 6.9% year over year. Along with its earnings release, BorgWarner announced that it has inked a deal to acquire Santroll's light vehicle eMotor business for up to ¥1.4 billion.
For full-year 2022, BWA anticipates net sales within $15.9-$16.5 billion, indicating an increase from $14.8 billion recorded in 2021. Importantly, BorgWarner envisions electric vehicle revenues of more than $800 million for 2022, doubling from 2021 levels. Free cash flow is projected in the band of $700-$800 million. (BorgWarner Beats on Q4 Earnings, Announces Buyout Deal)
Genuine Parts reported fourth-quarter 2021 adjusted earnings of $1.79 per share, up 17.8% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $1.61 per share. The company reported net sales of $4,803 million, surpassing the Zacks Consensus Estimate of $4,675 million. The top line was also higher than the year-ago quarter’s $4,252 million. GPC had cash/cash equivalents and long-term debt of $715 million and $2,409 million, respectively, at 2021-end.
Genuine Parts projects revenues from automotive and industrial sales to witness a year-over-year uptick of 4-6% and 20-22%, respectively. Overall sales growth is projected in the range of 9-11%. Full-year adjusted earnings per share are envisioned in the band of $7.45-$7.60. Operating cash flow is expected between $1.5 billion and $1.7 billion. Free cash flow is projected in the band of $1.2-$1.4 billion. (Genuine Parts Q4 Earnings & Sales Top Estimates, Up Y/Y)
LKQ Corp reported adjusted earnings of 87 cents per share for fourth-quarter 2021, surpassing the Zacks Consensus Estimate of 77 cents and increasing 26.1% from 69 cents a year ago. The aftermarket auto parts distributor registered quarterly revenues of $3,185 million, beating the Zacks Consensus Estimate of $3,068.6 million and increasing 7.9% from the year-ago level. For the fourth quarter, cash flow provided by operating activities totaled $5 million. Capital expenditure summed $160 million, with the company recording a negative free cash flow of $155.7 million.
For 2022, LKQ projects EPS in the range of $3.5-$3.8 and adjusted EPS of $3.72-$4.02. It envisions generating free cash flow of a minimum of $1 billion. LKQ also forecasts organic revenue growth for parts and services in the range of 3-5%. (LKQ's Q4 Earnings and Sales Beat Estimates, Increase 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 keep a tab on January commercial vehicle registrations in Europe, likely to be released by the ACEA this week. Also, stay tuned for quarterly results of a host of auto companies that are slated to be reported this week.
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Auto Stock Roundup: Q4 Earnings of AAP, BWA, GPC & LKQ in Focus
January 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 edged up 0.9% year over year to 2.53 million units, snapping eight consecutive monthly declines. Sales of new energy vehicles surged 136% year over year to 431,000 units in January.
The European Automobile Manufacturers Association (“ACEA”) also released data for passenger car registrations made in January 2022. New car registrations in Europe witnessed a year-over-year decline of 6%, marking a record low number of registrations for the month of January. Sales in four key markets — namely France, Spain, Italy and Germany — witnessed mixed results. While Italy and France saw double-digit declines of 19.7% and 18.6%, Germany and Spain recorded year-over-year growth of 8.5% and 1%, respectively.
Meanwhile, a few S&P 500 companies from the auto space including Advance Auto Parts, Inc. (AAP - Free Report) , BorgWarner Inc. (BWA - Free Report) , Genuine Parts Company (GPC - Free Report) and LKQ Corporation (LKQ - Free Report) released their quarterly reports last week. Encouragingly, each of them managed to pull off a comprehensive beat.
Earnings Snapshots of Last Week’s Key Releases
Advance Auto reported adjusted earnings of $2.07 per share for fourth-quarter 2021 (ended Jan 1, 2022), increasing 17.6% from the prior-year figure and topping the Zacks Consensus Estimate of $1.97 on higher-than-expected comps growth. Advance Auto generated net revenues of $2,397 million, topping the Zacks Consensus Estimate of $2,362 million and edging up 1.3% from the year-ago reported figure. The company also approved a 50% hike in its quarterly cash dividend.
Advance Auto estimates 2022 net sales in the band of $11.2-$11.5 billion. Comparable store sales growth and adjusted operating income margin are envisioned in the range of 1-3% and 10-10.2%, respectively. Advance Auto expects capex in the $300-$350 million range and targets free cash flow of a minimum of $775 million. (Advance Auto Beats Q4 Earnings Estimates, Hikes Payout)
BorgWarner reported adjusted earnings of $1.06 per share for fourth-quarter 2021, declining from $1.18 recorded in the prior-year period but beating the Zacks Consensus Estimate of 74 cents. The automotive equipment supplier reported net sales of $3,655 million, outpacing the Zacks Consensus Estimate of $3,462 million. The top-line figure, however, declined 6.9% year over year. Along with its earnings release, BorgWarner announced that it has inked a deal to acquire Santroll's light vehicle eMotor business for up to ¥1.4 billion.
For full-year 2022, BWA anticipates net sales within $15.9-$16.5 billion, indicating an increase from $14.8 billion recorded in 2021. Importantly, BorgWarner envisions electric vehicle revenues of more than $800 million for 2022, doubling from 2021 levels. Free cash flow is projected in the band of $700-$800 million. (BorgWarner Beats on Q4 Earnings, Announces Buyout Deal)
Genuine Parts reported fourth-quarter 2021 adjusted earnings of $1.79 per share, up 17.8% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $1.61 per share. The company reported net sales of $4,803 million, surpassing the Zacks Consensus Estimate of $4,675 million. The top line was also higher than the year-ago quarter’s $4,252 million. GPC had cash/cash equivalents and long-term debt of $715 million and $2,409 million, respectively, at 2021-end.
Genuine Parts projects revenues from automotive and industrial sales to witness a year-over-year uptick of 4-6% and 20-22%, respectively. Overall sales growth is projected in the range of 9-11%. Full-year adjusted earnings per share are envisioned in the band of $7.45-$7.60. Operating cash flow is expected between $1.5 billion and $1.7 billion. Free cash flow is projected in the band of $1.2-$1.4 billion. (Genuine Parts Q4 Earnings & Sales Top Estimates, Up Y/Y)
LKQ Corp reported adjusted earnings of 87 cents per share for fourth-quarter 2021, surpassing the Zacks Consensus Estimate of 77 cents and increasing 26.1% from 69 cents a year ago. The aftermarket auto parts distributor registered quarterly revenues of $3,185 million, beating the Zacks Consensus Estimate of $3,068.6 million and increasing 7.9% from the year-ago level. For the fourth quarter, cash flow provided by operating activities totaled $5 million. Capital expenditure summed $160 million, with the company recording a negative free cash flow of $155.7 million.
For 2022, LKQ projects EPS in the range of $3.5-$3.8 and adjusted EPS of $3.72-$4.02. It envisions generating free cash flow of a minimum of $1 billion. LKQ also forecasts organic revenue growth for parts and services in the range of 3-5%. (LKQ's Q4 Earnings and Sales Beat Estimates, Increase 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 keep a tab on January commercial vehicle registrations in Europe, likely to be released by the ACEA this week. Also, stay tuned for quarterly results of a host of auto companies that are slated to be reported this week.