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What's in Store for Fiat Chrysler (FCAU) in Q1 Earnings?

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Fiat Chrysler Automobiles N.V. (FCAU - Free Report) is set to report first-quarter 2017 results before the opening bell on Apr 26. The company reported one miss and three beats in the trailing four quarters, posting an average positive earnings surprise of 39.67%. Let’s see how things are shaping up for this announcement.

Factors Influencing this Quarter

In first-quarter 2017, Fiat Chrysler clocked higher sales in Europe which should drive results. For the quarter, the company’s Europe sales improved 14.6% year over year to almost 230,000 units. Additionally, in first-quarter 2017, the company’s subsidiary, Maserati North America, Inc., saw sales rise 46% to 3,288 units. The upside in sales is likely to have a positive impact on the company’s revenues and earnings.

Fiat Chrysler expects revenue in 2017 to be in the range of €115 billion–€120 ($123.4 billion–$128.8 billion), compared to the €111 billion earned in 2016. The company expects adjusted net profit to be over €3 billion ($3.2 billion), up from the €2.52 billion recorded in 2016.

Earnings Whispers

Our proven model does not conclusively show that Fiat Chrysler is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:

Zacks ESP: The Earnings ESP for Fiat Chrysler is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 41 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Fiat Chrysler carries a Zacks Rank #2 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions. 

Price Performance

In the last three months, share price of Fiat Chrysler increased 57.9% while the Zacks categorized Auto-Manufacturers-Foreign industry saw a 4.2% increase. The company benefitted from strong sales recorded in Europe.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Cooper Tire & Rubber Company (CTB - Free Report) has an Earnings ESP of +14.49% and a Zacks Rank #3. The company is slated to report first-quarter 2017 results on Apr 27. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ferrari N.V. (RACE - Free Report) has an Earnings ESP of +1.92% and a Zacks Rank #3. The company’s first-quarter 2017 financial results are expected for release on May 4.

General Motors Company (GM - Free Report) has an Earnings ESP of +4.86% and a Zacks Rank #3. The company is scheduled to report first-quarter 2017 financial numbers on Apr 28.

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