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Auto Stock Roundup: AutoZone, AAP Miss Estimates; Tesla Offers Shares; Toyota Partners Uber
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The last week was mostly favorable for the auto sector, with a number of positive developments and good fortune in the stock market. However, the earnings reports during the week were a little disappointing as both AutoZone, Inc. (AZO - Free Report) and Advance Auto Parts Inc. (AAP - Free Report) missed earnings and revenue estimates. The top and bottom lines of AutoZone improved year over year, while Advance Auto Parts’ earnings increased despite a decline in revenues.
Coming back to the positive developments, Tesla Motors, Inc. (TSLA - Free Report) announced a public offering of shares to finance its accelerated production plans, while Toyota Motor Corporation (TM - Free Report) announced its collaboration with Uber. Even General Motors Company (GM - Free Report) announced plans to expand its Maven car-sharing service.
Recap of the Week’s Most Important Stories
1. AutoZone reported a 12.6% rise in earnings per share to $10.77 for the third quarter of fiscal 2016 (ended May 7, 2016) from $9.57 recorded in the year-ago quarter. Earnings, however, missed the Zacks Consensus Estimate of $10.96 by a wide margin. Quarterly revenues improved 4% year over year to $2.59 billion. However, the figure lagged the Zacks Consensus Estimate of $2.65 billion (read more: AutoZone's Q3 Earnings & Revenues Miss Estimates).
2. Advance Auto Parts reported a 5% increase in adjusted earnings to $2.51 per share in the first quarter of fiscal 2016 (ended Apr 23, 2016) from $2.39 in the prior-year quarter. However, the figure missed the Zacks Consensus Estimate of $2.61. Revenues dropped 1.9% year over year to $2.98 billion, falling short of the Zacks Consensus Estimate of $3.01 billion. The underperformance was due to a fall in comparable store sales due to a service shortfall and lower demand resulting from unfavorable weather.
Advance Auto Parts expects comparable store sales to decline 3% to 5% in fiscal 2016, compared to the previous forecast of low single-digit growth. The revised outlook is based on the company’s performance in the reported quarter (read more: Advance Auto Parts Q1 Earnings Miss; Cuts View).
3. Tesla announced a public offering of shares to finance the accelerated production plan for Model 3 as well as ramp up the annual production volume to 500,000 units by 2018, rather than 2020 as planned earlier. The company may also use part of the proceeds as working capital and for other general corporate purposes.
Tesla is offering 6.8 million shares, which can be increased to almost 8.24 million if underwriters exercise their option to buy additional shares. This should result in net proceeds of $1.4 billion, after deducting underwriting discounts and commissions, and estimated offering expenses. The net proceeds can increase to $1.7 billion, if underwriters exercise their option to buy additional shares (read more: Tesla to Issue Shares to Finance Production Ramp Up).
4. Toyota announced that it signed a memorandum of understanding (MOU) with Uber, under which they will collaborate on ridesharing services. As part of this alliance, Toyota Financial Services Corporation and Mirai Creation Investment Limited Partnership (an investment fund backed by Toyota and Japanese bank, Sumitomo Mitsui Banking Corp) will invest in Uber (read more: Toyota Collaborates with Uber for Ridesharing Services).
5. General Motors announced that it is expanding its car-sharing service, Maven to Boston, Chicago and Washington, D.C. With this, in a limited time span of four months, Maven has expanded in five markets, including New York City and Ann Arbor, MI. General Motors has already started offering this application-based service in over 15 sites in Chicago. The company has 30 vehicles of Chevrolet, Cadillac and Buick brands available under this service in the city. Meanwhile, General Motors will be launching Maven+ in Washington D.C. in the coming month. The service will be available to residents of the Hepburn, a luxury apartment community. Maven City will also be available throughout the city by the end of June. In Boston, the automaker will launch Maven+ and Maven City in this summer (read more: General Motors Expands Maven to 3 New Cities).
Performance
The auto sector had a positive run over the last week, driven by company-specific factors as well as improvement in the overall market. Among the auto stocks listed below, Advance Auto Parts gained the maximum despite a weak earnings report and guidance cut.
Meanwhile, all auto stocks listed below had a poor run over the last six months. Toyota lost the most over this period.
Company
Last 1-Week Period
Last 6 Months
GM
+2.9%
-13.0%
F
+2.7%
-7.0%
TSLA
+4.0%
-5.2%
TM
+1.1%
-17.5%
HMC
+3.0%
-15.4%
HOG
+2.7%
-7.2%
AAP
+6.8%
-6.9%
AZO
+0.9%
-2.3%
What’s Next in the Auto Space?
On May 30, 2016, Tata Motors Limited will report its financial results for the quarter ended Mar 31, 2016.
On Jun 1, 2016, automakers will report their U.S. auto sales for May. On the same day, Ford Motor Co. (F - Free Report) will pay a quarterly cash dividend of 15 cents per share to shareholders of record as of Apr 29.
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Auto Stock Roundup: AutoZone, AAP Miss Estimates; Tesla Offers Shares; Toyota Partners Uber
The last week was mostly favorable for the auto sector, with a number of positive developments and good fortune in the stock market. However, the earnings reports during the week were a little disappointing as both AutoZone, Inc. (AZO - Free Report) and Advance Auto Parts Inc. (AAP - Free Report) missed earnings and revenue estimates. The top and bottom lines of AutoZone improved year over year, while Advance Auto Parts’ earnings increased despite a decline in revenues.
Coming back to the positive developments, Tesla Motors, Inc. (TSLA - Free Report) announced a public offering of shares to finance its accelerated production plans, while Toyota Motor Corporation (TM - Free Report) announced its collaboration with Uber. Even General Motors Company (GM - Free Report) announced plans to expand its Maven car-sharing service.
Recap of the Week’s Most Important Stories
1. AutoZone reported a 12.6% rise in earnings per share to $10.77 for the third quarter of fiscal 2016 (ended May 7, 2016) from $9.57 recorded in the year-ago quarter. Earnings, however, missed the Zacks Consensus Estimate of $10.96 by a wide margin. Quarterly revenues improved 4% year over year to $2.59 billion. However, the figure lagged the Zacks Consensus Estimate of $2.65 billion (read more: AutoZone's Q3 Earnings & Revenues Miss Estimates).
2. Advance Auto Parts reported a 5% increase in adjusted earnings to $2.51 per share in the first quarter of fiscal 2016 (ended Apr 23, 2016) from $2.39 in the prior-year quarter. However, the figure missed the Zacks Consensus Estimate of $2.61. Revenues dropped 1.9% year over year to $2.98 billion, falling short of the Zacks Consensus Estimate of $3.01 billion. The underperformance was due to a fall in comparable store sales due to a service shortfall and lower demand resulting from unfavorable weather.
Advance Auto Parts expects comparable store sales to decline 3% to 5% in fiscal 2016, compared to the previous forecast of low single-digit growth. The revised outlook is based on the company’s performance in the reported quarter (read more: Advance Auto Parts Q1 Earnings Miss; Cuts View).
3. Tesla announced a public offering of shares to finance the accelerated production plan for Model 3 as well as ramp up the annual production volume to 500,000 units by 2018, rather than 2020 as planned earlier. The company may also use part of the proceeds as working capital and for other general corporate purposes.
Tesla is offering 6.8 million shares, which can be increased to almost 8.24 million if underwriters exercise their option to buy additional shares. This should result in net proceeds of $1.4 billion, after deducting underwriting discounts and commissions, and estimated offering expenses. The net proceeds can increase to $1.7 billion, if underwriters exercise their option to buy additional shares (read more: Tesla to Issue Shares to Finance Production Ramp Up).
4. Toyota announced that it signed a memorandum of understanding (MOU) with Uber, under which they will collaborate on ridesharing services. As part of this alliance, Toyota Financial Services Corporation and Mirai Creation Investment Limited Partnership (an investment fund backed by Toyota and Japanese bank, Sumitomo Mitsui Banking Corp) will invest in Uber (read more: Toyota Collaborates with Uber for Ridesharing Services).
5. General Motors announced that it is expanding its car-sharing service, Maven to Boston, Chicago and Washington, D.C. With this, in a limited time span of four months, Maven has expanded in five markets, including New York City and Ann Arbor, MI. General Motors has already started offering this application-based service in over 15 sites in Chicago. The company has 30 vehicles of Chevrolet, Cadillac and Buick brands available under this service in the city. Meanwhile, General Motors will be launching Maven+ in Washington D.C. in the coming month. The service will be available to residents of the Hepburn, a luxury apartment community. Maven City will also be available throughout the city by the end of June. In Boston, the automaker will launch Maven+ and Maven City in this summer (read more: General Motors Expands Maven to 3 New Cities).
Performance
The auto sector had a positive run over the last week, driven by company-specific factors as well as improvement in the overall market. Among the auto stocks listed below, Advance Auto Parts gained the maximum despite a weak earnings report and guidance cut.
Meanwhile, all auto stocks listed below had a poor run over the last six months. Toyota lost the most over this period.
Company
Last 1-Week Period
Last 6 Months
GM
+2.9%
-13.0%
F
+2.7%
-7.0%
TSLA
+4.0%
-5.2%
TM
+1.1%
-17.5%
HMC
+3.0%
-15.4%
HOG
+2.7%
-7.2%
AAP
+6.8%
-6.9%
AZO
+0.9%
-2.3%
What’s Next in the Auto Space?
On May 30, 2016, Tata Motors Limited will report its financial results for the quarter ended Mar 31, 2016.
On Jun 1, 2016, automakers will report their U.S. auto sales for May. On the same day, Ford Motor Co. (F - Free Report) will pay a quarterly cash dividend of 15 cents per share to shareholders of record as of Apr 29.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>