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Auto Stock Roundup: U.S. Sales Fall; Ford, Honda Beat on Earnings
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U.S. auto sales declined for the third consecutive month in October. Meanwhile, Ford Motor Co. (F - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) posted earnings beat for the quarter ended Sep 30. Tesla Motors, Inc. (TSLA - Free Report) unveiled a new solar roof product while General Motors Company (GM - Free Report) announced a partnership with Uber.
1. U.S. light-vehicle sales dropped 5.9% year over year to 1.37 million units in Oct 2016, as per Autodata. This is the fifth of the 10 reported months this year in which sales declined. Moreover, sales on a seasonally adjusted annualized rate (“SAAR”) basis fell to 17.98 million units in the month from 18.2 million units in Oct 2015. Nevertheless, SAAR for the month was higher than 17.74 million units in Sep 2016.
2. Ford posted adjusted earnings per share of 26 cents in the third quarter of 2016 that was 26 cents lower than the figure recorded in third-quarter 2015 (excluding special items). However, earnings per share comfortably surpassed the Zacks Consensus Estimate of 21 cents. Ford Automotive logged revenues of $33.3 billion, surpassing the Zacks Consensus Estimate of $32.02 billion.
The company reaffirmed its 2016 pre-tax profit guidance of around $10.2 billion. Ford reaffirmed its 2016 automotive revenue to be equal to or higher than the 2015 levels. The company also anticipates recording strong Automotive segment operating cash flow, albeit below the 2015 levels. However, adjusted earnings per share and automotive operating margin are now expected to be lower than 2015 (read more: Ford's Q3 Earnings Surpass Expectations, Decline Y/Y).
Ford currently carries a Zacks Rank #3 (Hold).
3. Honda reported consolidated income of ¥177 billion ($1.75 billion) or ¥98.26 per share (97 cents per ADR) in the second quarter (ended Sep 30, 2016) of fiscal 2017, up 38.6% from the year-ago quarter. Earnings per share surpassed the Zacks Consensus Estimate of 59 cents.
Consolidated net sales and other operating revenues decreased 9.9% year over year to ¥3.26 trillion ($32.27 billion). The figure also missed the Zacks Consensus Estimate of $33.88 billion.
For fiscal 2017, Honda expects revenues to decline 8.2% to ¥13.4 trillion ($132.52 billion), lower than the previous guidance of ¥13.75 trillion ($130.95 billion). Net income is projected to improve 20.5% to ¥415 billion ($4.1 billion) or ¥230.26 ($2.28) per share, up from the previous expectation of ¥390 billion ($3.71 billion) or ¥216.39 ($2.06) per share (read more: Honda Beats on Q2 Earnings, Misses Revenues).
Currently, Honda has a Zacks Rank #4 (Sell).
4. Tesla showcased new solar roof shingles for homes at an event in Los Angeles. These solar shingles are made of a kind of textured glass and embedded with devices that convert sunlight into electricity. They will be more durable than conventional roofing options, and are expected to last, on average, two to three times longer.
The company plans to make four different roof designs: Tuscan Glass tile, Smooth Glass tile, Textured Glass tile, and Slate Glass tile. The solar tiles are designed to collect sunlight and store energy inside Powerwall 2 (read more: Tesla's New Solar Roof Shingles Remind Us of Its Future in Energy).
Tesla currently carries a Zacks Rank #3.
5. General Motors’ personal mobility brand Maven is collaborating with ridesharing service Uber to allow people to lease qualified vehicles at discounted rates and no mileage limits. Chevrolet Cruze, Malibu and Trax vehicles are being offered in the pilot program.
The companies in the auto sector recorded weak performance last week. Tesla lost the most among the stocks listed below. The electric carmaker was also the biggest loser over the last six months.
Meanwhile, Harley-Davidson, Inc. (HOG - Free Report) gained the most over the longer term.
A few auto companies, including Toyota Motor Corporation (TM - Free Report) and Tata Motors Limited , will release their financial results in the coming week.
Further, some automakers will report their China and Europe sales for October in the coming days.
Where Do Zacks' Investment Ideas Come From?
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Auto Stock Roundup: U.S. Sales Fall; Ford, Honda Beat on Earnings
U.S. auto sales declined for the third consecutive month in October. Meanwhile, Ford Motor Co. (F - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) posted earnings beat for the quarter ended Sep 30. Tesla Motors, Inc. (TSLA - Free Report) unveiled a new solar roof product while General Motors Company (GM - Free Report) announced a partnership with Uber.
(Read the previous roundup here: Auto Stock Roundup for Oct 27, 2016)
Recap of the Week’s Most Important Stories
1. U.S. light-vehicle sales dropped 5.9% year over year to 1.37 million units in Oct 2016, as per Autodata. This is the fifth of the 10 reported months this year in which sales declined. Moreover, sales on a seasonally adjusted annualized rate (“SAAR”) basis fell to 17.98 million units in the month from 18.2 million units in Oct 2015. Nevertheless, SAAR for the month was higher than 17.74 million units in Sep 2016.
2. Ford posted adjusted earnings per share of 26 cents in the third quarter of 2016 that was 26 cents lower than the figure recorded in third-quarter 2015 (excluding special items). However, earnings per share comfortably surpassed the Zacks Consensus Estimate of 21 cents. Ford Automotive logged revenues of $33.3 billion, surpassing the Zacks Consensus Estimate of $32.02 billion.
The company reaffirmed its 2016 pre-tax profit guidance of around $10.2 billion. Ford reaffirmed its 2016 automotive revenue to be equal to or higher than the 2015 levels. The company also anticipates recording strong Automotive segment operating cash flow, albeit below the 2015 levels. However, adjusted earnings per share and automotive operating margin are now expected to be lower than 2015 (read more: Ford's Q3 Earnings Surpass Expectations, Decline Y/Y).
Ford currently carries a Zacks Rank #3 (Hold).
3. Honda reported consolidated income of ¥177 billion ($1.75 billion) or ¥98.26 per share (97 cents per ADR) in the second quarter (ended Sep 30, 2016) of fiscal 2017, up 38.6% from the year-ago quarter. Earnings per share surpassed the Zacks Consensus Estimate of 59 cents.
Consolidated net sales and other operating revenues decreased 9.9% year over year to ¥3.26 trillion ($32.27 billion). The figure also missed the Zacks Consensus Estimate of $33.88 billion.
For fiscal 2017, Honda expects revenues to decline 8.2% to ¥13.4 trillion ($132.52 billion), lower than the previous guidance of ¥13.75 trillion ($130.95 billion). Net income is projected to improve 20.5% to ¥415 billion ($4.1 billion) or ¥230.26 ($2.28) per share, up from the previous expectation of ¥390 billion ($3.71 billion) or ¥216.39 ($2.06) per share (read more: Honda Beats on Q2 Earnings, Misses Revenues).
Currently, Honda has a Zacks Rank #4 (Sell).
4. Tesla showcased new solar roof shingles for homes at an event in Los Angeles. These solar shingles are made of a kind of textured glass and embedded with devices that convert sunlight into electricity. They will be more durable than conventional roofing options, and are expected to last, on average, two to three times longer.
The company plans to make four different roof designs: Tuscan Glass tile, Smooth Glass tile, Textured Glass tile, and Slate Glass tile. The solar tiles are designed to collect sunlight and store energy inside Powerwall 2 (read more: Tesla's New Solar Roof Shingles Remind Us of Its Future in Energy).
Tesla currently carries a Zacks Rank #3.
5. General Motors’ personal mobility brand Maven is collaborating with ridesharing service Uber to allow people to lease qualified vehicles at discounted rates and no mileage limits. Chevrolet Cruze, Malibu and Trax vehicles are being offered in the pilot program.
General Motors carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance
The companies in the auto sector recorded weak performance last week. Tesla lost the most among the stocks listed below. The electric carmaker was also the biggest loser over the last six months.
Meanwhile, Harley-Davidson, Inc. (HOG - Free Report) gained the most over the longer term.
Company
Last 1-Week Period
Last 6 Months
GM
-0.4%
+0.6%
F
-4.0%
-15.1%
TSLA
-7.0%
-19.1%
TM
-1.8%
+11.8%
HMC
-5.2%
+6.1%
HOG
-1.0%
+16.4%
AAP
-4.0%
-11.5%
AZO
-1.8%
-5.9%
Auto-Tires-Trucks Sector Price Index
Auto-Tires-Trucks Sector Price Index
What’s Next in the Auto Space?
A few auto companies, including Toyota Motor Corporation (TM - Free Report) and Tata Motors Limited , will release their financial results in the coming week.
Further, some automakers will report their China and Europe sales for October in the coming days.
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research.See the stocks free >>