Earnings reports for the quarter ending Jun 30, 2017 for the auto stocks have started pouring in. A few major auto companies, which have already announced their results, are General Motors Company (GM - Free Report) , PACCAR Inc (PCAR - Free Report) and Harley-Davidson, Inc. (HOG - Free Report) .
Four important companies expected to come up with their results on Jul 27 are LKQ Corporation (LKQ - Free Report) , BorgWarner Inc. (BWA - Free Report) , Fiat Chrysler Automobiles N.V. (FCAU - Free Report) and Adient plc (ADNT - Free Report) .
According to the latest Earnings Outlook, as of Jul 19, 54 companies from the S&P 500 category have already reported their quarterly numbers. These companies, as a whole, posted earnings and revenues beat ratios of 79.6% and 72.2%, respectively. As of that date, 10% companies from the Auto, Tires and Trucks sector have reported earnings for the quarter ended Jun 30, 2017.
However, this reporting season, earnings and revenue growth for auto companies are expected to be in the negative territory. Auto stocks are expected to register 10.3% and 0.8% year-over-year decline in earnings and revenues, respectively. However, the S&P 500 companies, as a whole, are expected to record 7.2% and 4.5% year-over-year growth in earnings and revenues, respectively.
Of late, the auto sector is going through a rough patch. The problems of high level of inventory and frequent recalls are adversely affecting the companies.
Also, U.S. government’s plans of exiting the NAFTA treaty and implementation of tariffs might negatively impact auto stocks.
That said, let’s take a look at the four auto companies scheduled to release their results tomorrow.
We relied on the Zacks methodology, combining a favorable Zacks Rank – Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) – and a positive Earnings ESP, to predict the chances of a beat this quarter.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Per our proprietary methodology, Earnings ESP shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Research shows that with this combination of rank and ESP, chances of a positive earnings surprise are as high as 70% for the stocks.
Chicago, IL-based LKQ Corporation is one of the leading providers of alternative and specialty parts to repair and accessorize automobiles and other vehicles. Our model does not conclusively predict that the company is likely to deliver a positive earnings surprise in the second quarter, as it currently has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). (Read more: LKQ Corp. to Report Q2 Earnings: What's in the Cards?).
Michigan-based BorgWarner is a leading manufacturer of powertrain products for major automakers. Currently, the company carries an Earnings ESP of 0.00% and a Zacks Rank #3. Our model does not conclusively predict that the company is likely to deliver a positive earnings surprise in the second quarter. (Read more: BorgWarner to Report Q2 Earnings: What's in Store?).
U.K.-based Fiat Chrysler Automobiles is engaged in designing, engineering, manufacturing, distributing and selling vehicles and components and production systems. Our model does not conclusively predict that the company is likely to deliver a positive earnings surprise in the second quarter, as it currently has an Earnings ESP of -6.78% and a Zacks Rank #3. (Read more: What's in the Cards for Fiat Chrysler in Q2 Earnings?).
Ireland-based Adient plc is engaged in producing and delivering automotive seating for vehicle classes and OEMs. Our model does not conclusively predict that the company is likely to deliver a positive earnings surprise in third-quarter fiscal 2017, as it currently has an Earnings ESP of -0.40% and a Zacks Rank #3.
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