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Auto Stock Roundup: Earnings Approaching End, Ford to Spend on Self-Driving Technology
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Earnings season for the auto companies is nearing the end. Past week witnessed some important auto companies such as Magna International Inc. (MGA - Free Report) , Advance Auto Parts, Inc. (AAP - Free Report) and Westport Fuel Systems Inc. (WPRT - Free Report) reporting their numbers for the quarter ending Jun 30. Westport Fuel reported quarterly loss of $0.04 per share, in line with the Zacks Consensus Estimate. On the other hand, Advance Auto Parts reported an earnings beat while Magna missed estimates.
The week witnessed Ford Motor Company (F - Free Report) reportedly planning to spend around $740 million for the renovation of Detroit’s extensive vacant train depot and the redevelopment of other properties. The idea is to aid the research and development of self-driving vehicles.
In another development, Lear Corporation (LEA - Free Report) has opened a manufacturing facility at Flint, MI. The facility will manufacture automotive seats for one of its major customers, General Motors Company.
1. In second-quarter 2018, Magna reported adjusted earnings per share of $1.67, missing the Zacks Consensus Estimate of $1.71. However, earnings were higher than the year-ago figure of $1.45.
Revenues increased 12.5% year over year to $10.3 billion. However, the top line missed the Zacks Consensus Estimate of $10.6 billion. The year-over-year rise in sales is primarily owing to growth across all of its operating segments.
Moreover, the company reported a 6% increase in adjusted EBIT to $803 million from the year-ago figure of $785 million.
Revenues at the Body Exteriors & Structures segment was $4.6 billion in the reported quarter compared with $4.1 billion recorded in second-quarter 2017. Revenues at the Power & Vision segment totaled $3.2 billion in comparison with $2.9 billion recorded in the prior-year quarter. Revenues at the Seating Systems segment totaled $1.42 billion compared with $1.37 billion recorded in the prior-year quarter. Revenues from the Complete Vehicles segment increased to $1.28 billion in the quarter under review from $869 million in second-quarter 2017. (Read more: Magna Misses Q2 Earnings Estimates, Lowers Guidance)
AutoNation currently carries a Zacks Rank #5 (Strong Sell).
2. Advance Auto Parts reported adjusted earnings of $1.97 per share in second-quarter 2018 (ended Jul 14, 2018), up from $1.58 in the prior-year quarter. The figure surpassed the Zacks Consensus Estimate of $1.85. Adjusted operating income increased to $167.5 million from $146.7 million in second-quarter 2017.
Advance Auto Parts reported net revenues of $2.33 billion, beating the Zacks Consensus Estimate of $2.26 billion. Revenues were 2.8% higher than the year-ago quarter. During the quarter under review, comparable store sales were 2.8% higher year over year.
Gross profit was $1.01 billion in the reported quarter, higher than the prior-year quarter figure of $993.1 million. Gross Profit margin decreased 40 basis points year over year to 44.3%.
Adjusted selling, general and administrative (SG&A) expenses totaled $811.6 million or 34.9% of sales compared with $1797.6 million or 35.2% of sales. (Read more:Advance Auto Parts Beats on Q2 Earnings & Revenues)
3. Lear has opened a manufacturing facility at Flint, MI. The facility will manufacture automotive seats for one of its major customers, General Motors. In over 30 years, this marks the first major construction of a supplier manufacturing facility in Flint.
The seating manufactured at the plant will serve as just-in-time delivery to the close by General Motors Flint assembly plant. Additionally, its products will be supplied at General Motors’ another plant in Fort Wayne, CA.
The new conveyor system at the hub, which is enabled with Lear’s LPS (Lear Production System), is going to check all major elements of seat manufacturing. Situated in a 156,000-sq.ft. area. The facility is expected to employ roughly 600 team members by the end of 2019. Out of the total, 400 will be newly hired employees.
Associates of the new hub will manage their teams, including member hiring, providing quality assurance and aiding peers. The factory will focus on a top-notch team formation, structured organization and promote employee engagement. (Read more: Lear Opens Seat Manufacturing Facility in Michigan)
Lear currently carries a Zacks Rank #3 (Hold).
4. Westport Fuel second-quarter 2018 adjusted net loss from continuing operations was 4 cents per share, in line with the Zacks Consensus Estimate. Net loss per share from continuing operations was 12 cents per share in second-quarter 2017.
Total net loss from continuing operations in the reported quarter was $5.7 million compared with net loss of $13.4 million in second-quarter 2017.
Westport Fuel logged consolidated revenues of $80.5 million in the reported quarter, up 37% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $64.5 million. This upside was driven by strong sales growth in aftermarket, DOEM, and light- and medium-duty OEM businesses. Rise of euro vis-a-vis the U.S. dollar, along with shipments of Westport HPDI 2.0 product, also contributed to rise in revenues.
During the quarter under review, consolidated gross margin increased to $21.7 million (27% of sales) from $15.3 million (26% of sales) recorded in the year-ago quarter.
Adjusted EBITDA amounted to $8.6 million compared with a negative $5.3 million in the prior-year quarter, reflecting strong operational results across businesses.
In second-quarter 2018, CWI revenues rose to $86.9 million from the prior-year quarter’s figure of $79.5 million. This rise is driven by the higher demand for near-zero emissions products and higher parts revenues.
Westport Fuel carries a Zacks Rank #3.
5.Ford intends to make another move in the self-driving vehicle front. Per Associated Press, this auto giant intends to spend around $740 million for the renovation of Detroit’s extensive vacant train depot and the redevelopment of other properties. The underlying aim is to foster the research and development of self-driving vehicles.
Notably, Ford is working on bringing autonomous vehicle technology to the market. The company will add several driver-assist technologies in its vehicles over the next five years. In June 2018, the company used the Michigan Central depot as a background, and laid out plans for the 105-year-old train station and surrounding Corktown neighborhood.
Ford currently carries a Zacks Rank #5.
Performance
In the last week, Tesla, Inc. (TSLA - Free Report) has declined the most. Advance Auto Parts has gained the maximum.
In the past six months, Advance Auto Parts has increased the most. Honda has declined the most.
Company
Last Week
Last 6 Months
GM
-4.6%
-12.5%
F
-6%
-11%
TSLA
-8.5%
1%
TM
-4.1%
-10.5%
HMC
-4.2%
-17.4%
HOG
-6.1%
-13%
AAP
7.9%
46.9%
AZO
2.6%
5.3%
What’s Next in the Auto Space?
Watch out for the usual news releases as well as the few remaining earnings releases of auto companies over the next week.
Today's Stocks From Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Auto Stock Roundup: Earnings Approaching End, Ford to Spend on Self-Driving Technology
Earnings season for the auto companies is nearing the end. Past week witnessed some important auto companies such as Magna International Inc. (MGA - Free Report) , Advance Auto Parts, Inc. (AAP - Free Report) and Westport Fuel Systems Inc. (WPRT - Free Report) reporting their numbers for the quarter ending Jun 30. Westport Fuel reported quarterly loss of $0.04 per share, in line with the Zacks Consensus Estimate. On the other hand, Advance Auto Parts reported an earnings beat while Magna missed estimates.
The week witnessed Ford Motor Company (F - Free Report) reportedly planning to spend around $740 million for the renovation of Detroit’s extensive vacant train depot and the redevelopment of other properties. The idea is to aid the research and development of self-driving vehicles.
In another development, Lear Corporation (LEA - Free Report) has opened a manufacturing facility at Flint, MI. The facility will manufacture automotive seats for one of its major customers, General Motors Company.
(Read the previous roundup here: Auto Stock Roundup for Aug 9, 2018)
Recap of the Week’s Most Important Stories
1. In second-quarter 2018, Magna reported adjusted earnings per share of $1.67, missing the Zacks Consensus Estimate of $1.71. However, earnings were higher than the year-ago figure of $1.45.
Revenues increased 12.5% year over year to $10.3 billion. However, the top line missed the Zacks Consensus Estimate of $10.6 billion. The year-over-year rise in sales is primarily owing to growth across all of its operating segments.
Moreover, the company reported a 6% increase in adjusted EBIT to $803 million from the year-ago figure of $785 million.
Revenues at the Body Exteriors & Structures segment was $4.6 billion in the reported quarter compared with $4.1 billion recorded in second-quarter 2017. Revenues at the Power & Vision segment totaled $3.2 billion in comparison with $2.9 billion recorded in the prior-year quarter. Revenues at the Seating Systems segment totaled $1.42 billion compared with $1.37 billion recorded in the prior-year quarter. Revenues from the Complete Vehicles segment increased to $1.28 billion in the quarter under review from $869 million in second-quarter 2017. (Read more: Magna Misses Q2 Earnings Estimates, Lowers Guidance)
AutoNation currently carries a Zacks Rank #5 (Strong Sell).
2. Advance Auto Parts reported adjusted earnings of $1.97 per share in second-quarter 2018 (ended Jul 14, 2018), up from $1.58 in the prior-year quarter. The figure surpassed the Zacks Consensus Estimate of $1.85. Adjusted operating income increased to $167.5 million from $146.7 million in second-quarter 2017.
Advance Auto Parts reported net revenues of $2.33 billion, beating the Zacks Consensus Estimate of $2.26 billion. Revenues were 2.8% higher than the year-ago quarter. During the quarter under review, comparable store sales were 2.8% higher year over year.
Gross profit was $1.01 billion in the reported quarter, higher than the prior-year quarter figure of $993.1 million. Gross Profit margin decreased 40 basis points year over year to 44.3%.
Adjusted selling, general and administrative (SG&A) expenses totaled $811.6 million or 34.9% of sales compared with $1797.6 million or 35.2% of sales. (Read more:Advance Auto Parts Beats on Q2 Earnings & Revenues)
Advance Auto Parts currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3. Lear has opened a manufacturing facility at Flint, MI. The facility will manufacture automotive seats for one of its major customers, General Motors. In over 30 years, this marks the first major construction of a supplier manufacturing facility in Flint.
The seating manufactured at the plant will serve as just-in-time delivery to the close by General Motors Flint assembly plant. Additionally, its products will be supplied at General Motors’ another plant in Fort Wayne, CA.
The new conveyor system at the hub, which is enabled with Lear’s LPS (Lear Production System), is going to check all major elements of seat manufacturing. Situated in a 156,000-sq.ft. area. The facility is expected to employ roughly 600 team members by the end of 2019. Out of the total, 400 will be newly hired employees.
Associates of the new hub will manage their teams, including member hiring, providing quality assurance and aiding peers. The factory will focus on a top-notch team formation, structured organization and promote employee engagement. (Read more: Lear Opens Seat Manufacturing Facility in Michigan)
Lear currently carries a Zacks Rank #3 (Hold).
4. Westport Fuel second-quarter 2018 adjusted net loss from continuing operations was 4 cents per share, in line with the Zacks Consensus Estimate. Net loss per share from continuing operations was 12 cents per share in second-quarter 2017.
Total net loss from continuing operations in the reported quarter was $5.7 million compared with net loss of $13.4 million in second-quarter 2017.
Westport Fuel logged consolidated revenues of $80.5 million in the reported quarter, up 37% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $64.5 million. This upside was driven by strong sales growth in aftermarket, DOEM, and light- and medium-duty OEM businesses. Rise of euro vis-a-vis the U.S. dollar, along with shipments of Westport HPDI 2.0 product, also contributed to rise in revenues.
During the quarter under review, consolidated gross margin increased to $21.7 million (27% of sales) from $15.3 million (26% of sales) recorded in the year-ago quarter.
Adjusted EBITDA amounted to $8.6 million compared with a negative $5.3 million in the prior-year quarter, reflecting strong operational results across businesses.
In second-quarter 2018, CWI revenues rose to $86.9 million from the prior-year quarter’s figure of $79.5 million. This rise is driven by the higher demand for near-zero emissions products and higher parts revenues.
Westport Fuel carries a Zacks Rank #3.
5.Ford intends to make another move in the self-driving vehicle front. Per Associated Press, this auto giant intends to spend around $740 million for the renovation of Detroit’s extensive vacant train depot and the redevelopment of other properties. The underlying aim is to foster the research and development of self-driving vehicles.
Notably, Ford is working on bringing autonomous vehicle technology to the market. The company will add several driver-assist technologies in its vehicles over the next five years. In June 2018, the company used the Michigan Central depot as a background, and laid out plans for the 105-year-old train station and surrounding Corktown neighborhood.
Ford currently carries a Zacks Rank #5.
Performance
In the last week, Tesla, Inc. (TSLA - Free Report) has declined the most. Advance Auto Parts has gained the maximum.
In the past six months, Advance Auto Parts has increased the most. Honda has declined the most.
What’s Next in the Auto Space?
Watch out for the usual news releases as well as the few remaining earnings releases of auto companies over the next week.
Today's Stocks From Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>