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Auto Stock Roundup: HMC Operating Profit Decline, TM Earnings Miss

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Several companies from the Zacks Auto sector — including Oshkosh Corporation (OSK - Free Report) , Cooper-Standard Holdings Inc. (CPS - Free Report) , American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) , Adient PLC (ADNT - Free Report) and CNH Industrial N.V. (CNHI - Free Report) — came out with financial results for the quarter ending on Mar 31, 2019, in the past week.

Oshkosh’s earnings and revenues surpassed estimates. While American Axle and CNH Industrial reported an earnings beat, their revenues missed estimates. The other two companies — Cooper-Standard and Adient — missed earnings estimates but surpassed the same for revenues.

Recap of the Week’s Most Important Stories

1.    Oshkosh recorded earnings of $1.82 per share in the second quarter of fiscal 2019 (Mar 31, 2019), beating the Zacks Consensus Estimate of $1.62. In the year-ago quarter, earnings were $1.47 per share. Net income was $128.5 million compared with $110.8 million in the year-ago quarter.

In the reported quarter, consolidated net sales rose 5.5% to $1.99 billion. The figure surpassed the Zacks Consensus Estimate of $1.96 billion. This rise in sales was due to increased sales in higher access equipment, defense, and fire & emergency segments.

In the second quarter of fiscal 2019, consolidated operating income rose 12.3% year over year to $175.6 million (8.8% of sales).

Net sales for Access equipment increased 6.4% year over year to $988 million, driven by rise in sales volume and higher pricing. In the quarter under review, operating income was $119.8 million (12.1% of sales).

The Defense segment’s net sales increased 13.7% to $486.7 million, owing to improved sales to the U.S. government. Operating income rose 7.9% to $52.2 million (10.7% of sales).

Net sales for the Fire & Emergency segment rose 3.7% to $283.2 million. This rise was driven by sales of higher content units and improved pricing. Operating income increased 1.7% to $36.6 million (12.9% of sales).

Net sales for the Commercial segment decreased 9.9% to $238 million on lower deliveries, impacted by the winter weather. The segment’s operating income decreased to $7.8 million (3.3% of sales) from $16.4 million (6.2% of sales) recorded in the year-ago quarter.

Oshkosh had cash and cash equivalents of $322 million as of Mar 31, 2019, compared with $454.6 million as of Sep 30, 2018. The company’s long-term debt was $818.5 million in the second quarter of fiscal 2019, similar to the figure recorded at the end of fiscal 2018.

In the first six months of fiscal 2019, Oshkosh’s net cash used by operating activities was $153 million compared with a cash inflow of $44 million a year ago. (Read more: Oshkosh Beats Q2 Earnings Estimates, Raises FY19 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 adjusted earnings of 67 cents per share in first-quarter 2019, missing the Zacks Consensus Estimate of $1. Further, the bottom-line figure was lower than the year-ago quarter figure of $3.45 per share. Challenging market conditions impacted the company’s results.

Sales were $880 million, which beat the Zacks Consensus Estimate of $874 million. The year-ago figure was $967.4 million. This year-over-year decline in sales was primarily due to unfavorable volume and mix, foreign exchange, and price adjustments, partly offset by positive impacts of acquisitions.

During the reported quarter, adjusted net income was $11.8 million, down from the prior-year quarter figure of $63.8 million. Adjusted EBITDA declined to $66.4 million from $122.6 million recorded in the first quarter of 2018.

Sales in the North America segment were $474.7 million, marking a decline from the year-ago quarter figure of $499.2 million. In first-quarter 2019, the segment’s adjusted EBITDA was $57.6 million, marking a decline from $86.8 million recorded in the prior-year quarter.

Sales in the Europe segment were $254.6 million in the first quarter, down from $292.4 million in first-quarter 2018. The segment’s adjusted EBITDA was $9.4 million compared with $23 million in the prior-year quarter.

The Asia Pacific segment reported sales of $127.5 million in the reported quarter, down from $149.2 million in first-quarter 2018. The segment recorded adjusted EBITDA of $767,000, down from $13.5 million in first-quarter 2018.

The company’s South America segment reported sales of $23.2 million during the quarter under review, down from $26.6 million in first-quarter 2018. The segment witnessed loss of $1.4 million, up from the prior-year quarter’s loss of $597,000. (Read more:Cooper-Standard Q1 Earnings Miss Estimates, Down Y/Y)

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

3.    American Axle posted adjusted earnings of 36 cents per share in the first quarter of 2019, beating the Zacks Consensus Estimate of 35 cents. In first-quarter 2018, adjusted earnings were 98 cents.

During the quarter under review, the company reported net income of $41.6 million compared with $89.4 million a year ago. Improved operational performance along with supporting customers on important program launches aided American Axle to witness an increase in earnings.

Sales increased to $1.72 billion, marking a decline from the year-ago figure of $1.86 billion. The top line missed the Zacks Consensus Estimate of $1.74 billion.

American Axle’s selling, general & administrative expenses were $90.7 million for first-quarter 2019 in comparison with $97.3 million in the prior-year quarter.

Gross profit decreased to $222 million in first-quarter 2019 from $316 million a year ago. Operating income declined to $94 million from $176 million.

American Axle had cash and cash equivalents of $252 million as of Mar 31, 2019, down from $476 million as of Dec 31, 2018. Net long-term debt was $3.7 billion as of Mar 31, 2019, similar to the figure recorded on Dec 31, 2018.

Cash outflow from operations for the first three months of 2019 was $80.2 million in comparison with the prior year’s inflow of $67 million. At the end of the first three months of 2019, American Axle’s adjusted free cash outflow was $204 million compared with $63.5 million for the same period of the last year. (Read more: American Axle Q1 Earnings Top Estimates, Revenues Miss)

American Axle currently carries a Zacks Rank #4 (Sell).

4.    Honda Motor Co., Ltd. (HMC - Free Report) reported operating profit of ¥42.4 billion in the fourth quarter of fiscal 2019, down 66.6% from the year-ago period. This decrease in operating profit can be attributed to the adverse foreign currency effects, and impact of changes in the global automobile production network and capability on Europe. These negative factors were partly offset by continuous cost-reduction efforts.

In the reported quarter, profit before income taxes decreased 41.7% to ¥111.1 billion. Loss per share attributable to owners of the parent was ¥7.4, marking a decline of ¥67.99 from the year-ago figure.

Revenues increased 3.4% year over year to ¥4.05 trillion. This rise can be attributed to higher sales revenues at automobile and financial services businesses.

For the three months ended Mar 31, 2019, revenues from the Automobile segment increased 2.9% to ¥2.84 trillion. During the reported quarter, consolidated units sold increased 3.1% year over year to 0.98 million.

The Motorcycle segment’s revenues decreased 6.1% to ¥489.4 billion and consolidated units sold increased 10.4% year over year to 2.84 million.

During the reported quarter, the Life Creation segment’s consolidated units sold decreased 5.2% year over year to 2.34 million. (Read more: Honda Operating Profit Decreases Roughly 67% Y/Y in Q4)

Honda currently carries a Zacks Rank #4.

5.    Toyota Motor Corporation’s (TM - Free Report) earnings were $2.89 per ADR in fourth-quarter fiscal 2019 (ended Mar 31, 2019). Earnings missed the Zacks Consensus Estimate of $3.91. This Japan-based automaker reported net income of ¥ 459.5 billion ($4.2 billion) in the quarter under review, down from ¥ 481 billion ($4.5 billion) in the year-ago period.

Toyota’s total net revenues rose to $70 billion (¥7.75 trillion) from the year-ago figure of $69 billion (¥7.58 trillion). The figure surpassed the Zacks Consensus Estimate of $69.9 billion.

In fiscal 2019, consolidated vehicle sales went up to 8,976,795 units, marking an increase of 12,401 units from the last fiscal year. The automaker witnessed a decline in vehicle sales across North America and Other regions (consisting of Central and South America, Oceania, Africa, and the Middle East). However, sales in Japan, Europe and Asia rose from the year-ago period.

During the fiscal year, Toyota generated net revenues of ¥30.2 trillion ($272 billion) compared with ¥ 29.4 trillion ($265 billion) in fiscal 2018.

However, the company’s net income declined to ¥2 billion ($18 million) compared with the year-ago figure of ¥2.6 billion ($23.4 million).

The Automotive segment’s net revenues rose to ¥ 6.9 trillion ($62.8 billion) in fourth-quarter fiscal 2019 from ¥6.8 trillion ($63 billion) in the prior-year quarter. Operating income decreased to ¥393 billion ($3.6 billion) from the year-ago figure of ¥530 billion ($4.9 billion).

The Financial Services segment’s net revenues rose to ¥550 billion ($5 billion) in the quarter under review from ¥507 billion ($4.7 billion) in the prior-year period. The segment’s operating income was ¥85 billion ($773.6 million), marking an increase from ¥58 billion ($538 million) recorded in the fourth quarter of fiscal 2018.

All Other businesses’ net revenues increased to ¥515 billion ($4.7 billion) in the quarter under review from ¥496 billion ($4.6 billion) in the prior year. Further, operating income increased to ¥51 billion ($461 million) from the year-ago figure of ¥40 billion ($365.7 million).

Toyota currently carries a Zacks Rank #4.

Performance

Last week, Tesla stock gained the maximum while Honda declined the most.

In the last six months, AutoZone, Inc.gained the maximum while Tesla declined the most.

CompanyLast WeekLast 6 Months
GM-1.4%7.1%
F0.4%10.2%
TSLA4.6%-30.1%
TM-0.9%3.9%
HMC-3.5%-6.1%
HOG-0.8%-11.1%
AAP-3.2%-7.3%
AZO-1.8%26.7%


What’s Next in the Auto Space?

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

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