As we enter one of the busiest weeks of the Q2 earnings season, the auto sector seems to be well placed. Nearly 27.3% of the sector’s companies had posted results as of Jul 22. These companies recorded 30.4% year-over-year growth in earnings and 7.8% in revenues, per our Earnings Preview report. In comparison, total S&P 500 companies that have reported so far posted an average decline in earnings and a 2.6% rise in revenues.
By the end of Q2, auto sector earnings and revenue growth is projected to be around 18.4% and 2.1%, respectively. Meanwhile, total S&P 500 earnings and revenues are expected to decline 3.4% and 0.5% year over year, respectively.
Revenues of auto manufacturers are being driven by strong sales in major markets like the U.S., Europe and China, in the first half of 2016. The high vehicle sales volumes are also boosting auto parts’ demand from original equipment manufacturers. The high volume of safety recalls is further driving volumes of parts' makers. However, sluggishness in some markets and the negative impact of foreign currency translation are some headwinds.
Among the many stocks lined up to report this week, let’s see what awaits these three auto equipment stocks slated to release their second-quarter 2016 results on Jul 26.
Accuride Corp. carries a Zacks Rank #3 (Hold). Earnings ESP for the company is currently pegged at 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 4 cents. We note that the company delivered mixed earnings surprises in the last four quarters. This resulted in a negative average surprise of 56.79%.
Tower International, Inc. (TOWR - Free Report) has an Earnings ESP of +2.82% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is currently pegged at 71 cents. Tower International surpassed earnings estimates in each of the last four quarters. This resulted in a positive average surprise of 8.42%.
Wabash National Corp. (WNC - Free Report) has an Earnings ESP of -8.51% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is currently pegged at 47 cents. Wabash National surpassed earnings estimates in the last four quarters. This resulted in a positive average surprise of 32.38%.
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