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Auto Roundup: Spotlight on Q1 Reports of GM, F, PCAR, LKQ & ORLY

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Last week, five S&P 500 auto companies came out with their first-quarter 2022 earnings release. While General Motors (GM - Free Report) beat Q1 earnings estimates, Ford (F - Free Report) missed the same. Both the U.S. auto giants witnessed a year-over-year fall in sales and profits. Meanwhile, trucking giant PACCAR, Inc. (PCAR - Free Report) not just delivered a comprehensive beat but also recorded year-over-year growth in sales and earnings. The aftermarket auto parts distributor LKQ Corp (LKQ - Free Report) also put up an impressive Q1 show, with earnings and revenues beating expectations and increasing on a year-over-year basis. Auto parts retailer O’Reilly Automotive (ORLY - Free Report) also impressed investors with strong results.

Each of these five companies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Inside the Headlines

General Motors reported first-quarter 2022 adjusted earnings of $2.09 per share, topping the Zacks Consensus Estimate of $1.56. Better-than-expected contributions from North America, International and Financial segments drove the outperformance. The bottom line, however, compares unfavorably with the year-ago quarter’s earnings of $2.25 per share. Revenues of $35,979 million missed the Zacks Consensus Estimate of $36,252.5 million. The top line compares favorably with the year-ago figure of $32,474 million.

General Motors had cash and cash equivalents of $16,349 million as of Mar 31, 2022. The long-term automotive debt at the end of the quarter was $16,155 million. The company recorded an adjusted automotive free cash flow of $6 million in first-quarter 2022. For 2022, the company expects full-year net income to be in a range of $9.6-$11.2 billion, higher than the previous range of $9.4-$10.8 billion. The adjusted EBIT forecast remains unchanged in the range of $13.0 billion to $15.0 billion. The estimate for adjusted EPS was increased from the previous range of $6.25-$7.25 to $6.5-$7.5.

Ford reported adjusted earnings of 38 cents per share in first-quarter 2022, missing the Zacks Consensus Estimate of 39 cents. Lower-than-expected profits in North America and a wider-than-expected pretax loss in China led to this underperformance.  The bottom line compares unfavorably with the year-ago quarter’s earnings of 89 cents. The company’s consolidated first-quarter revenues came in at $34.5 billion, down 4.9% year over year.In the first quarter, the total revenues from the automotive business declined 4% to $32.1 billion and missed the Zacks Consensus Estimate of $39.1 billion.

Ford reported a negative adjusted FCF of $580 million during the quarter. It had cash and cash equivalents of $10,579 million as of Mar 31, 2022 and the automotive long-term debt stood at $17,158 million. Ford expects adjusted EBIT for 2022 between $11.5 billion and $12.5 billion, implying an uptick of 15-25% from the 2021 level. Moreover, 2022 vehicle wholesale volumes are anticipated to jump 10% to 15%. Adjusted FCF is envisioned in the range of $5.5-6.5 billion for 2022, suggesting a jump from $4.6 billion recorded in 2021.

PACCAR reported earnings of $1.72 per share in first-quarter 2022, topping the Zacks Consensus Estimate of $1.51 and rising from the year-ago figure of $1.35. Higher-than-expected revenues across all segments resulted in the outperformance. Consolidated revenues (including trucks and financial services) came in at $6,472.6 million, up from $5,845.5 million recorded in the corresponding quarter of 2021. Sales from Trucks, Parts and Others were $6,106.4 million, beating the consensus mark of $5,781 million.

PACCAR’s cash and marketable debt securities amounted to $4,672.4 million as of Mar 31, 2022, compared with $4,813 million on Dec 31, 2021. Capex and R&D expenses for 2022 are envisioned in the band of $425-$475 million and $350-$400 million, respectively. The company declared a cash dividend of 34 cents in the reported quarter.

LKQ reported adjusted earnings of $1 per share in first-quarter 2022, surpassing the Zacks Consensus Estimate of 91 cents and increasing 6.4% year over year from 94 cents. This outperformance was driven by the higher-than-anticipated revenues from the North American and European segments. LKQ registered quarterly revenues of $3,348 million, beating the Zacks Consensus Estimate of $3,279.7 million. In addition, the top line climbed 5.6% from the year-ago level of $3,170.8 million. The parts and services organic revenues also increased 6.9% year over year.

LKQ had cash and cash equivalents of $327 million on Mar 31, 2022. The long-term debt (excluding the current portion) amounted to $2,680 million as of Mar 31, 2022. For 2022, the company expects adjusted EPS in the band of $3.80-$4.10, up from the prior view of $3.72-$4.02 per share. The company’s estimate of free cash flow remains the same, at a minimum of $1 billion. Operating cash flow is expected to be $1.3 billion. It forecasts organic revenue growth for parts and services in the range of 4.5%-6.5%, up from 3-5% estimated earlier.

O’Reilly reported first-quarter 2022 adjusted earnings per share of $7.17, missing the Zacks Consensus Estimate of $7.43. The bottom line, however, increased from $7.06 a share recorded in the prior-year quarter. This automotive parts retailer registered quarterly revenues of $3,296 million, beating the consensus mark of $3,283.3 million. The top line was also 6.6% higher than the prior-year figure of $3,090.9 million. Comps grew 4.8% year over year, topping the Zacks Consensus Estimate of 4.17%.

O’Reilly had cash and cash equivalents of $191.5 million as of Mar 31, 2022, lower than $611 million in the year-ago quarter. Its long-term debt was $3,828 million, higher than the year-ago level of $3,824.3 million. For 2022, ORLY expects total revenues within the range of $14.2-$14.5 billion. Earnings per share are estimated in the band of $32.35-$32.85. The company forecasts comparable store sales growth within 5-7%. Free cash flow remains in the band of $1.3-$1.6 billion and capital expenditures within $650-$750 million.

Price Performance

The following table shows the price movement of some of the major auto players over the past week and six-month period.

Zacks Investment Research
Image Source: Zacks Investment Research

What’s Next in the Auto Space?

Stay tuned for quarterly results of a host of auto companies that are slated to report this week.Also, watch out for any update on how automakers will tackle the semiconductor shortage —aggravated by the Russia-Ukraine war and rising COVID-19 infections— and make changes in business operations.