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Auto Stock Roundup: AAP Misses, LKQ & GPC Beat Q4 Earnings Estimates

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This week, most carmakers across China resumed operations after around three weeks of shutdown due to the deadly coronavirus breakout. Auto biggies including General Motors, Fiat Chrysler and Toyota Motor confirmed that they are restarting production in China. However, Wuhan — the epicenter of the virus outbreak — is most likely to remain in lockdown. Vehicle assembly plants in Wuhan — including JVs with Honda, PSA Groupe and Renault — are likely to be closed until next week.

S&P auto companies like Advance Auto Parts, Genuine Parts Company and LKQ Corporation came up with quarterly numbers this week. While Advance Auto Parts missed earnings estimates, Genuine Parts and LKQ Corporation delivered earnings beat. All the three companies carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some auto companies declared dividend hikes this week, including the American motorcycle manufacturer Harley-Davidson (HOG - Free Report) , auto parts firm Genuine Parts and automotive retailer Group 1 Automotive (GPI - Free Report) . Harley-Davidson raised its payout by 1.3% sequentially and boosted buybacks up to an additional 10 million shares. Group 1 Automotive increased fourth quarter 2019 dividend to 30 cents a share, reflecting a sequential uptick of 3.4%. Further, Genuine Parts announced a 4% increase in regular quarterly cash dividend for 2020, marking the 64th consecutive year of increased dividends paid to its shareholders.

(Read the Last Auto Stock Roundup here)

Recap of the Week’s Most Important Stories

1. Advance Auto Parts (AAP - Free Report) reported adjusted earnings of $1.64 per share in fourth-quarter 2019 (ended Dec 28, 2019), up 40.2% from the prior-year figure. The figure, however, missed the Zacks Consensus Estimate of $1.36 per share. The firm generated net revenues of $2,113 million, missing the Zacks Consensus Estimate of $2,124 million and declining 0.4% from the year-ago reported figure. The company also authorized $700 million as an addition to the existing $400-million share-repurchase program in fourth-quarter 2019. For full-year 2020, it anticipates consolidated revenues within $9,880-$10,100 million. Further, adjusted operating income margin is estimated in the band of 8.4-8.7% and capital expenditure is projected at $275-$325 million. (Read more: Advance Auto Parts Q4 Earnings & Revenue Miss Estimates)

2. Genuine Parts (GPC - Free Report) reported adjusted earnings of $1.35 per share in fourth-quarter 2019, beating the Zacks Consensus Estimate of $1.31.The bottom line was in line with the year-ago profit of $1.35 a share.Genuine Parts reported net sales of $4,706 million, outpacing the Zacks Consensus Estimate of $4,688 million. The top line, however, increased 2.2% year over year. For full-year 2020, the company expects total sales growth of 3-4%. It currently expects adjusted earnings per share within $5.80-$5.90 in 2020. Capital expenditures are projected at $275-$325 million. (Read more: Genuine Parts Q4 Earnings & Revenues Surpass Estimates)

3. LKQ Corporation (LKQ - Free Report) reported adjusted earnings of 54 cents per share in fourth-quarter 2019, surpassing the Zacks Consensus Estimate of 52 cents. The bottom line also increased 13% year over year. Quarterly revenues came in at 3,009 million, missing the Zacks Consensus Estimate of $3,015 million. However, the top line increased from the year-ago level of $3,002 million. Higher year-over-year revenues from the North American segment led to the improved results. Revenues from the North American unit totaled $1,283 million, up 2.3% year over year. For 2020, LKQ Corp. forecasts adjusted EPS within $2.46-$2.58. (Read more: LKQ Corp Q4 Earnings Beat, Revenues Miss Estimates)

4. Sonic Automotive, Inc. (SAH - Free Report) registered adjusted earnings per share of 97 cents in fourth-quarter 2019, beating the Zacks Consensus Estimate of 89 cents. Moreover, the bottom line rose from 76 cents per share reported in the year-ago quarter. Total revenues in the reported quarter amounted to $2,748.4 million, up 6.7% from the prior-year period. However, revenues missed the Zacks Consensus Estimate of $2,766 million.In the quarter under review, the firm’s EchoPark segment recorded revenues of $308.6 million, reflecting a 52% uptick from the year-ago figure. Its stores sold 12,676 units, up 45% on a year-over-year basis. (Read More: Sonic Automotive Q4 Earnings Top, Sales Lag Estimates)

5. Allison Transmission Holdings(ALSN - Free Report) fourth-quarter 2019 earnings came in at 85 cents per share, beating the Zacks Consensus Estimate of 72 cents. The reported figure, however, comes in lower than the year-ago quarter’s $1.14. In the reported quarter, net sales declined 5% year over year to $617 million due to lower demand in the Service Parts, Support Equipment & Other and Global Off-Highway end markets. The figure, however, outpaced the Zacks Consensus Estimate of $597 million. For full-year 2020, Allison expects net sales of $2,375-$2,475 million. It anticipates net income of $425-$475 million and adjusted EBITDA is projected at $855-$915 million. Net cash provided by operating activities is projected at $600-$640 million for the year, while adjusted FCF is expected in the range of $430 million to $480 million. (Read more: Allison Q4 Earnings & Sales Trump Estimates, Down Y/Y)

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

0.1%

-5.3%

F

-2.6%

-11.2%

TSLA

11.9%

304.9%

TM

-1.4%

7.3%

HMC

1%

17.8%

HOG

3.8%

12.2%

AAP

5.8%

3.6%

AZO

1.5%

0.1%

 

What’s Next in the Auto Space?

Investors are awaiting quarterly results of a host of auto companies includingCooper Tire & Rubber Company, Cooper-Standard Holdings and Superior Industries International, which are scheduled to report next week.

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