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Auto Stock Roundup: Toyota's Operating Income Rises Y/Y, OSK Beats, CPS Misses

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Within the Auto sector, a few important companies such as Oshkosh Corporation (OSK - Free Report) , Cooper-Standard Holdings Inc. (CPS - Free Report) , American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) , Toyota Motor Corporation (TM - Free Report) and CNH Industrial N.V. (CNHI - Free Report) have released their earnings results in the past week.

During the quarter under review, Toyota’s operating income rose 11% year over year due to marketing activities and cost-reduction initiatives. Oshkosh and CNH Industrial’s earnings beat estimates and the bottom line for the companies improved year over year as well. Conversely, American Axle and Cooper-Standard’s earnings missed the Zacks Consensus Estimate and declined year over year.

The week saw Toyota announced that it issued another massive recall, consisting more than one million vehicles globally. The recalled vehicles have faulty airbags that might inflate without a crash or fail to inflate in case of an accident.

Recap of the Week’s Most Important Stories

1.    In fourth-quarter fiscal 2018, Oshkosh recorded adjusted earnings of $1.78 per share, beating the Zacks Consensus Estimate of $1.45. In the year-ago quarter, adjusted earnings were $1.38. Net income was 151.3 million compared with $93.5 million in fourth-quarter fiscal 2017.

In fiscal 2018, Oshkosh generated net sales of $7.7 billion while adjusted earnings were $6.36 per share.

In the reported quarter, net sales rose 4.8% to $2.06 billion from $1.96 billion a year ago. The figure was almost in line with the Zacks Consensus Estimate of $2 billion. The rise in sales was primarily due to an increased demand for access equipment, partly offset by lower-than-anticipated sales in the defense segment.

During the fourth quarter of fiscal 2018, consolidated operating income increased 49.7% to $201.4 million (9.8% of sales) compared with $134.5 million (6.9% of sales) in the year-ago quarter.

Net sales for Access equipment increased 27.2% to $1.1 billion, driven by an enhanced demand for both aerial work platforms and telehandlers. The Defense segment’s net sales decreased 22.2% to $464.6 million due to the absence of international Mine Resistant Ambush Protected-All Terrain Vehicle (M-ATV) sales, partly offset by increased sales to the U.S. government.

Net sales for the Fire & Emergency segment rose 2.1% to $284 million. The rise was driven by improved pricing. Net sales for the Commercial segment decreased 2.2% to $254 million. The sales figure was impacted by lower package sales. (Read more: Oshkosh Tops Q4 Earnings Estimates, Issues '19 View)

Oshkosh currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2.    Cooper-Standard reported third-quarter 2018 adjusted earnings per share of $1.05, missing the Zacks Consensus Estimate of $2.50. Further, the bottom-line figure was lower than the year-ago quarter figure of $2.11 per share. Results in the reported quarter were impacted by challenging market conditions in Asia and Europe, and rising commodity costs.

Revenues decreased 0.8% year over year to $861.7 million. The decline in sales was primarily owing to exchange rate fluctuations, unfavorable volume and mix in Asia and Europe, and customer price reductions, which were partly offset by favorable volume and mix in North America.

During the reported quarter, adjusted net income was $19.1 million, down from the prior-year quarter figure of $39.5 million. The company launched 51 customer programs and grabbed net new business awards, totaling $91 million. Adjusted EBITDA declined 27.6% to $26.5 million compared with the third quarter of 2017.

Sales in the North America segment increased 7.8% to $471.6 million. The year-over-year rise in sales was mainly due to favorable volume and mix, and incremental sales related to acquisitions.

Sales in the Europe segment were $228.3 million in the third quarter compared with $254.4 million in third-quarter 2017. The decline was mainly due to unfavorable foreign exchange, and volume and mix.

The Asia Pacific segment reported sales of $136.2 million in the reported quarter, down from $148.5 million in third-quarter 2017. The year-over-year decrease was mainly due to unfavorable volume and mix, and unfavorable foreign exchange.

The company’s South America segment reported sales of $25.6 million during the reported quarter, down from $28.7 million in third-quarter 2017.  The fall was due to unfavorable foreign exchange. (Read more: Cooper-Standard Q3 Earnings Miss Estimates, Down Y/Y)

Cooper-Standard currently carries a Zacks Rank #5 (Strong Sell).

3.    American Axle posted adjusted earnings of 63 cents per share in the third quarter, missing the Zacks Consensus Estimate of 90 cents. In third-quarter 2017, adjusted earnings were 86 cents.
    
During the quarter under review, the company reported net income of $63.8 million or 55 cents per share compared with $86.2 million or 75 cents per share a year ago.

Revenues increased to $1.8 billion from $1.72 billion recorded a year ago. The top line slightly surpassed the Zacks Consensus Estimate of $1.78 billion.

American Axle’s SG&A (Selling, General & Administrative) expenses were $96.3 million for third-quarter 2018 in comparison with $102.3 million in the prior-year quarter.

Gross profit decreased to $267.4 million in third-quarter 2018 from $297.7 million a year ago. Operating income declined to $134.6 million from $148.2 million.

American Axle had cash and cash equivalents of $439.4 million as of Sep 30, 2018, up from $376.8 million as of Dec 31, 2017. Net long-term debt was $3.9 billion as of Sep 30, 2018, compared with $4 billion as of Dec 31, 2017.

Cash flow from operations for the first three months of 2018 was $223.8 million in comparison with $207.5 million recorded in the prior year. At the end of the first three months of 2018, American Axle’s adjusted free cash inflow was $121.3 million compared with an inflow of $87.8 million for the same period last year. (Read more: American Axle Q3 Earnings Miss Estimates, Revenues Rise)

American Axle currently carries a Zacks Rank #3 (Hold).

4.    Toyota’s operating income rose 11% to ¥579.1 billion ($5.2 billion) in second-quarter fiscal 2019 (ended Sep 30, 2018). The rise was due to marketing activities and cost reduction initiatives. Further, this Japanese automaker reported net income of ¥585 billion ($5.3 billion) in the quarter under review, up 28% from the year-ago period.

Consolidated revenues increased to ¥7.3 trillion ($65.9 billion) compared with ¥7.1 trillion ($64.4 billion) recorded in the prior-year quarter. The Zacks Consensus Estimate was $66.8 billion.

In the first six months of fiscal 2019, consolidated vehicle sales went up to 4,418,928 units globally, marking an increase of 29,493 units compared with the same period of the last year.

The Automotive segment’s net revenues rose to ¥6.5 trillion ($58.7 billion) in second-quarter fiscal 2019 in comparison with ¥6.4 trillion ($57.4 billion) in the prior-year quarter. Operating income increased to ¥462 billion ($4.2 billion) from the year-ago figure of ¥423 billion ($3.8 billion).

The Financial Services segment’s net revenues rose to ¥534 billion ($4.8 billion) in the quarter under review compared with ¥494 billion ($4.4 billion) in the prior-year period. Operating income increased to ¥81 billion ($733 million) from the year-earlier figure of ¥69 billion ($625 million).

All Other businesses’ net segmental revenues declined to ¥412 billion ($3.7 billion) in the quarter under discussion compared with ¥431 billion ($3.9 billion) in the last year. Operating income increased to ¥29 billion ($264 million) from the year-ago tally of ¥23 billion ($205 million). (Read more: Toyota's Cost-Cut Moves Drive Operating Income in Q2)

Toyota currently carries a Zacks Rank #3.

5.    CNH Industrial reported adjusted earnings per share of 16 cents in third-quarter 2018, up from 4 cents in the prior-year quarter. Moreover, the bottom line surpassed the Zacks Consensus Estimate of 13 cents.

Reportedly, adjusted net income rose to $222 million from $151 million recorded in third-quarter 2017.

Consolidated revenues were almost flat year over year to $6.69 billion. However, the figure missed the Zacks Consensus Estimate of $6.9 billion. The company’s net sales in Industrial Activities were $6.2 billion while adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of Industrial Activities increased 13% to $591 million.

Net revenues from the Agricultural Equipment segment rose 3.5% year over year to $2.6 billion. The rise was due to positive price across all regions and higher sales in NAFTA. Moreover, the segment’s adjusted EBIT was $196 million, marking a $23 million increase compared with the third quarter of 2017.

Construction Equipment segment’s revenues increased 17.5% to $726 million compared with the prior-year quarter. The gain was primarily due to favorable demand, majorly in NAFTA and APAC. Adjusted EBIT was $26 million, marking a $24 million gain compared with the prior-year quarter.

Revenues from the Commercial Vehicles slumped 6.6% to $2.4 billion compared with the prior-year quarter. Waning demand, primarily for heavy vehicle trucks in EMEA, led to this decline. The segment’s adjusted EBIT was $68 million, witnessing an increase of $25 million from third-quarter 2017.

Powertrain segment’s revenues declined 9.5% year over year to $972 million. The segment’s adjusted EBIT was $82 million, marking a $6 million decline compared with the second quarter of 2017.

Revenues from the Financial Services segment declined 1.9% year over year to $469 million. This decline was majorly due to a lower average portfolio balance in NAFTA. Adjusted EBIT was $123 million, a decline of $3 million from the prior-year quarter.

CNH Industrial currently carries a Zacks Rank #5 (Strong Sell).

Performance

In the last week, all these stocks gained. Maximum gain was witnessed by AutoZone, Inc. (AZO - Free Report) .

In the past six months, Advance Auto Parts, Inc. (AAP - Free Report) has increased the most, whereas Ford Motor Company (F - Free Report) declined the most.

CompanyLast WeekLast 6 Months
GM0.8%1.5%
F0.5%-14.8%
TSLA3.2%15.3%
TM1.9%-8.8%
HMC1.4%-12.8%
HOG7.2%1.6%
AAP6.7%45.9%
AZO7.8%20.7%


What’s Next in the Auto Space?

Watch out for the usual news releases as well as the earnings releases over the next week.

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