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Auto Stock Roundup: Q3 Earnings in Full Swing; F, GM, TSLA Earnings Top

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A host of auto companies reported quarterly numbers in the past week. U.S. auto bigwigs like General Motors (GM - Free Report) and Ford (F - Free Report) came up with better-than-expected earnings on strong performance of the North American market. Electric vehicle giant Tesla (TSLA - Free Report) delivered Q3 earnings beat, primarily aided by record Model 3 deliveries. Tesla currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, the United Auto Workers’ (“UAW”) nationwide strike against General Motors has finally ended, after the majority of UAW members approved the new contract. The new four-year contract covers nearly 50,000 workers, offering pay increases, bonuses and permanent jobs to temporary workers.

General Motors expects the 40-day long strike to cost the firm nearly $4 billion in 2019. According to the company’s CFO, the firm lost about 300,000 units in production due to the strike. General Motors now attempts to make serious efforts to make up for the losses.

Notably, the strike was called after the company’s four-year contract with workers expired on Sep 15 without any agreement on replacement. Notably, this marks the first major work stoppage at General Motors in the last 12 years and the longest national strike in the United States since 1970.

(Read the Last Auto Stock Roundup here).

Recap of the Week’s Most Important Stories

1. General Motors delivered a comprehensive beat in third-quarter 2019 on the back of better-than-expected performance of the North American market.The firm reported adjusted earnings of $1.72 per share in third-quarter 2019, topping the Zacks Consensus Estimate of $1.18. However, the bottom line declined 8% from the year-ago figure. The top U.S. carmaker reported revenues of $35,473 million, topping the Zacks Consensus Estimate of $34,153 million. However, the top line decreased from the year-ago figure of $35,791 million.The automaker’s global market share was 10.7% in the reported quarter, reflecting a marginal decline from 10.8% in the year-ago period. General Motors expects full-year capex to be $7.5 billion, reflecting a decline from the prior projection. Amid the impact of UAW strike, the company has revised its full-year view. It now forecasts adjusted EPS between $4.50 and $4.80 per share. (Read more: North American Segment Drives General Motors Q3 Earnings)

2. Ford reported third-quarter 2019 adjusted earnings per share of 34 cents, beating the Zacks Consensus Estimate of 26 cents. In the prior-year quarter, adjusted earnings were 29 cents per share. This outperformance resulted from higher-than-anticipated automotive sales in North America, Middle East and Africa segments. The firm generated automotive revenues of $33,931 million. The figure surpassed the Zacks Consensus Estimate of $33,818 million. In the prior-year quarter, the company recorded automotive revenues of $34,660 million. Ford has lowered its 2019 guidance amid higher warranty costs, sagging sales in China and high incentive spending in North America. Adjusted EPS for 2019 is anticipated in the range of $1.20-$1.32.It generated adjusted EPS of $1.30 a year ago. (Read more: Ford Beats Q3 Earnings and Sales Estimates, Trims View)

3. Tesla reported earnings per share of $1.86 in third-quarter 2019 against the Zacks Consensus Estimate of a loss of 15 cents. The company had recorded earnings of $2.90 per share in the prior-year quarter. This outperformance resulted from continued volume growth and cost control.Revenues declined to $6.3 billion from $6.82 billion registered in third-quarter 2018. The revenue figure missed the Zacks Consensus Estimate of $6.52 billion. During the quarter under review, Tesla reported record delivery of 97,000 vehicles, aided by rising Model 3 deliveries. The company is highly confident of exceeding 360,000 vehicle deliveries in 2019. (Read more: Tesla Beats on Q3 Earnings, Misses Revenue Estimates)

4. O’Reilly Automotive Inc. (ORLY - Free Report) reported earnings per share of $5.08 in third-quarter 2019, up 13% from $4.50 in the prior-year period. Moreover, the figure surpassed the Zacks Consensus Estimate of $4.78.The company’s quarterly revenues also rose 7% year over year to $2.67 billion. Moreover, the figure beat the Zacks Consensus Estimate of $2.63 billion. For fourth-quarter 2019, O’Reilly projects earnings within $4.12-$4.22 per share. Further, the company expects a 3-5% rise in consolidated comparable store sales.For 2019, O’Reilly reiterated total revenue projection in the range of $10-$10.3 billion and earnings per share in the range of $17.75-$17.85. For the full year, the company expects free cash flow of $1.0-$1.1 billion. (Read more: O'Reilly Earnings and Revenues Beat Estimates in Q3)

5. Cummins Inc. (CMI - Free Report) reported earnings of $3.83 per share in third-quarter 2019, missing the Zacks Consensus Estimate of $3.84. The underperformance was attributed to lower-than-expected profits from the Engine segment. Its revenues declined 3% year over year to $5.76 billion in the reported quarter. Moreover, revenues missed the Zacks Consensus Estimate of $5.83 billion.For 2019, Cummins now projects revenue decline of 2% from a year ago. Initially, it expected revenues to remain at the same level as 2018. The company downwardly revised its projection on lower truck production in North America, India, Brazil and Europe, and a decline in demand in off-highway markets, including North America construction and global mining. (Read more: Cummins Earnings and Revenues Miss Estimates in Q3)

Price Performance

The following table shows the price movement of some of the major auto players over the past week and six-month period.

In the past week, while Tesla has gained the most, Ford has registered the maximum loss. Even in the past six months, Tesla has registered the maximum gain, while Ford has declined the most.

Company

Last Week

Last 6 Months

GM

3.5%

-2.1%

F

-7.3%

-17.1%

TSLA

23.7%

34.6%

TM

1.2%

13.1%

HMC

2.7%

-1.1%

HOG

1.4%

10.1%

AAP

-0.7%

0.2%

AZO

5.0%

12.2%

 

What’s Next in the Auto Space?

Car enthusiasts will be keeping a close watch on October 2019 U.S. car sales, which will be coming out early next week. Investors in the auto sector would be closely tracking the monthly sales reports of auto biggies like Honda Motor (HMC - Free Report) , Hyundai and Toyota Motor (TM - Free Report) , among many others. They are keenly awaiting third-quarter 2019 earnings of Japanese auto giants including Toyota and Honda.

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