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What's in Store for Delphi Automotive (DLPH) in Q2 Earnings?

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Delphi Automotive PLC (DLPH - Free Report) is set to report second-quarter 2017 results on Aug 2. Last quarter, the company delivered a positive earnings surprise of 8.90%. The company also beat estimates in all of the trailing four quarters, thereby delivering an average positive earnings surprise of 7.87%.

Let’s see how things are shaping up for this announcement.

Delphi Automotive PLC Price and EPS Surprise


Factors to Consider

Delphi Automotive is one of the largest vehicle parts manufacturers in the world. The company’s innovative products have helped it to secure 25 leading global automobile manufacturers as customers.

Delphi Automotive regularly undertakes acquisitions and alliances to enhance its technological capability, increase its operating scale, augment its client base and expand geographically. In Apr 2017, the company acquired Valens, a developer of HDBaseT technology for the transmission of ultra-high definition data. In the same month, Delhi Automotive partnered with both Otonomo, a developer of data marketplace for automakers as well as Rosenberger, a high frequency connectivity company to enhance capabilities in high-speed data transmission.

For second-quarter 2017, Delphi Automotive’s adjusted earnings per share are expected in the range of $1.62–$1.68, up from $1.59 in the year-ago quarter. For 2017, the company expects its adjusted earnings per share to be in the range of $6.40–$6.70, higher than $6.28 per share in 2016. This raises hopes for good results in the second quarter.

However, negative currency translations and commodity price headwinds are a few concerns for the company.

Earnings Whispers

Our proven model does not conclusively show whether Delphi Automotive is likely to beat or miss estimates 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 Delphi Automotive is -0.61% as the Most Accurate estimate of $1.64 is pegged below the Zacks Consensus Estimate of $1.65. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Delphi Automotive carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company's negative ESP makes surprise predictin difficult.

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

Price Performance

Delphi Automotive’s stock has rallied 13.7% in the last three months, substantially outperforming the 6.6% gain of the industry it belongs to.

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 come up with an earnings beat this quarter:

Cummins Inc. (CMI - Free Report) has an Earnings ESP of +3.1% and carries a Zacks Rank #2. The company is expected to report second-quarter 2017 results on Aug 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tenneco Inc. (TEN - Free Report) has an Earnings ESP of +1.67% and carries a Zacks Rank #3. The company’s second-quarter 2017 financial results are expected to release on Jul 28.

Horizon Global Corporation (HZN - Free Report) has an Earnings ESP of +2.99% and carries a Zacks Rank #3. The company’s second-quarter 2017 financial results are expected to release on Aug 1.

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