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Auto Stock Roundup: GM, Honda, Toyota, Penske Automotive Beat on Earnings
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The auto sector recorded better-than-expected earnings over the last week, with General Motors Company (GM - Free Report) , Honda Motor Co. (HMC - Free Report) , Toyota Motor Corp. (TM - Free Report) and Penske Automotive Group, Inc. (PAG - Free Report) beating estimates for the quarter ended Dec 31, 2016. However, Honda and Penske Automotive failed to meet revenue estimates. Among other noteworthy developments, Lear Corp. (LEA - Free Report) announced an acquisition.
1. General Motors posted adjusted earnings of $1.28 per share in the fourth quarter of 2016 that surpassed the Zacks Consensus Estimate of $1.14. Earnings fell 7.9% from $1.39 per share recorded in the fourth quarter of 2015. Revenues came in at a record $43.9 billion, 10.8% higher than $39.6 billion in the year-ago quarter. Also, revenues surpassed the Zacks Consensus Estimate of $42.20 billion.
Adjusted earnings for 2016 jumped 21.9% to a record $6.12 per share from $5.02 earned in 2015. Earnings also surpassed the Zacks Consensus Estimate of $6.01. Revenues for 2016 increased 9.2% to a record $166.4 billion from $152.4 billion in 2015, and exceeded the Zacks Consensus Estimate of $165.12 billion.
General Motors expects 2017 adjusted earnings per share in the range of $6.00 to $6.50, compared with the 2016 figure of $6.12. The automaker also expects adjusted EBIT and adjusted EBIT margin to remain stable or improve, while revenues are projected to rise from 2016 (Read more: General Motors Beats on Q4 Earnings, Guidance Intact).
General Motors currently carries a Zacks Rank #2 (Buy).
2. Honda reported consolidated income of ¥168.8 billion ($1.55 billion) or ¥93.67 per share (86 cents per ADR) in the third quarter (ended Dec 31, 2016) of fiscal 2017. Earnings per share surpassed the Zacks Consensus Estimate of 49 cents. Consolidated net sales and other operating revenues declined 3.2% year over year to ¥3.50 trillion ($32.11 billion). The figure also missed the Zacks Consensus Estimate of $33.01 billion.
For fiscal 2017, Honda expects revenues to decline 5.5% to ¥13.8 trillion ($128.97 billion). Operating income is likely to grow 55.9% to ¥785 billion ($7.34 billion). Net income is projected to improve 58.2% to ¥545 billion ($5.09 billion) or ¥302.39 ($2.83) per share (read more: Honda Beats on Q3 Earnings, Misses Revenue Estimates).
3. Toyota recorded earnings of ¥159.54 per share ($2.92 per ADR) in third-quarter fiscal 2017 (ended Dec 31, 2016), down from ¥199.54 ($3.30) earned in third-quarter fiscal 2016 (ended Dec 31, 2015). Earnings surpassed the Zacks Consensus Estimate of $2.14. Consolidated revenues decreased 3.5% year over year to ¥7.08 trillion ($64.94 billion). The figure, however, surpassed the Zacks Consensus Estimate of $64.18 billion.
Toyota raised its consolidated vehicle sales guidance for fiscal 2017 to 8.90 million units from 8.85 million units guided earlier. The company raised its consolidated revenue guidance to ¥26.5 trillion ($247.7 billion) from the previous forecast of ¥26 trillion ($243 billion) for fiscal 2017. The operating income guidance has been raised to ¥1.85 trillion ($17.3 billion) from the previous forecast of ¥1.7 trillion ($15.9 billion). Net earnings are expected to be around ¥1.7 trillion ($15.9 billion), up from the prior view of ¥1.55 trillion ($14.5 billion). Earnings are expected to be ¥561.38 per share ($10.49 per ADR) (read more: Toyota Beats on Q3 Earnings and Revenues Estimates).
Currently, Toyota carries a Zacks Rank #3 (Hold).
4. Penske Automotive posted adjusted earnings per share of 91 cents in the fourth quarter of 2016, up 12.3% from the year-ago quarter. Moreover, earnings beat the Zacks Consensus Estimate of 87 cents. Revenues fell 0.7% year over year to $4.89 billion and missed the Zacks Consensus Estimate of $4.98 billion.
For 2016, Penske Automotive posted adjusted earnings per share of $3.93, up 7.1% the year-ago period. Moreover, earnings beat the Zacks Consensus Estimate of $3.91. Revenues gained 4.3% year over year to $20.1 billion, missing the Zacks Consensus Estimate of $20.2 billion.
Currently, Penske Automotive carries a Zacks Rank #2.
5. Lear Corp. announced an agreement to acquire the automotive seating business of Grupo Antolin. The buyout is expected to close in the first half of 2017 subject to customary conditions, including regulatory approvals in Europe.
Lear Corp. carries a Zacks Rank #2.
Performance
Most auto stocks recorded gains over the last week. General Motors posted maximum loss among the stocks listed below, while Honda gained the most.
Over the last six months, Tesla, Inc. (TSLA - Free Report) was the biggest gainer, while AutoZone, Inc. (AZO - Free Report) was the worst performer.
While the Q4 earnings season is underway, none of the major auto sector companies are expected to report results over the coming week. Meanwhile, a few automakers are expected to report their Europe sales data for January soon.
Where Do Zacks' Investment Ideas Come From?
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Auto Stock Roundup: GM, Honda, Toyota, Penske Automotive Beat on Earnings
The auto sector recorded better-than-expected earnings over the last week, with General Motors Company (GM - Free Report) , Honda Motor Co. (HMC - Free Report) , Toyota Motor Corp. (TM - Free Report) and Penske Automotive Group, Inc. (PAG - Free Report) beating estimates for the quarter ended Dec 31, 2016. However, Honda and Penske Automotive failed to meet revenue estimates. Among other noteworthy developments, Lear Corp. (LEA - Free Report) announced an acquisition.
(Read the previous roundup here: Auto Stock Roundup for Feb 2, 2017)
Recap of the Week’s Most Important Stories
1. General Motors posted adjusted earnings of $1.28 per share in the fourth quarter of 2016 that surpassed the Zacks Consensus Estimate of $1.14. Earnings fell 7.9% from $1.39 per share recorded in the fourth quarter of 2015. Revenues came in at a record $43.9 billion, 10.8% higher than $39.6 billion in the year-ago quarter. Also, revenues surpassed the Zacks Consensus Estimate of $42.20 billion.
Adjusted earnings for 2016 jumped 21.9% to a record $6.12 per share from $5.02 earned in 2015. Earnings also surpassed the Zacks Consensus Estimate of $6.01. Revenues for 2016 increased 9.2% to a record $166.4 billion from $152.4 billion in 2015, and exceeded the Zacks Consensus Estimate of $165.12 billion.
General Motors expects 2017 adjusted earnings per share in the range of $6.00 to $6.50, compared with the 2016 figure of $6.12. The automaker also expects adjusted EBIT and adjusted EBIT margin to remain stable or improve, while revenues are projected to rise from 2016 (Read more: General Motors Beats on Q4 Earnings, Guidance Intact).
General Motors currently carries a Zacks Rank #2 (Buy).
2. Honda reported consolidated income of ¥168.8 billion ($1.55 billion) or ¥93.67 per share (86 cents per ADR) in the third quarter (ended Dec 31, 2016) of fiscal 2017. Earnings per share surpassed the Zacks Consensus Estimate of 49 cents. Consolidated net sales and other operating revenues declined 3.2% year over year to ¥3.50 trillion ($32.11 billion). The figure also missed the Zacks Consensus Estimate of $33.01 billion.
For fiscal 2017, Honda expects revenues to decline 5.5% to ¥13.8 trillion ($128.97 billion). Operating income is likely to grow 55.9% to ¥785 billion ($7.34 billion). Net income is projected to improve 58.2% to ¥545 billion ($5.09 billion) or ¥302.39 ($2.83) per share (read more: Honda Beats on Q3 Earnings, Misses Revenue Estimates).
Currently, Honda has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
3. Toyota recorded earnings of ¥159.54 per share ($2.92 per ADR) in third-quarter fiscal 2017 (ended Dec 31, 2016), down from ¥199.54 ($3.30) earned in third-quarter fiscal 2016 (ended Dec 31, 2015). Earnings surpassed the Zacks Consensus Estimate of $2.14. Consolidated revenues decreased 3.5% year over year to ¥7.08 trillion ($64.94 billion). The figure, however, surpassed the Zacks Consensus Estimate of $64.18 billion.
Toyota raised its consolidated vehicle sales guidance for fiscal 2017 to 8.90 million units from 8.85 million units guided earlier. The company raised its consolidated revenue guidance to ¥26.5 trillion ($247.7 billion) from the previous forecast of ¥26 trillion ($243 billion) for fiscal 2017. The operating income guidance has been raised to ¥1.85 trillion ($17.3 billion) from the previous forecast of ¥1.7 trillion ($15.9 billion). Net earnings are expected to be around ¥1.7 trillion ($15.9 billion), up from the prior view of ¥1.55 trillion ($14.5 billion). Earnings are expected to be ¥561.38 per share ($10.49 per ADR) (read more: Toyota Beats on Q3 Earnings and Revenues Estimates).
Currently, Toyota carries a Zacks Rank #3 (Hold).
4. Penske Automotive posted adjusted earnings per share of 91 cents in the fourth quarter of 2016, up 12.3% from the year-ago quarter. Moreover, earnings beat the Zacks Consensus Estimate of 87 cents. Revenues fell 0.7% year over year to $4.89 billion and missed the Zacks Consensus Estimate of $4.98 billion.
For 2016, Penske Automotive posted adjusted earnings per share of $3.93, up 7.1% the year-ago period. Moreover, earnings beat the Zacks Consensus Estimate of $3.91. Revenues gained 4.3% year over year to $20.1 billion, missing the Zacks Consensus Estimate of $20.2 billion.
Currently, Penske Automotive carries a Zacks Rank #2.
5. Lear Corp. announced an agreement to acquire the automotive seating business of Grupo Antolin. The buyout is expected to close in the first half of 2017 subject to customary conditions, including regulatory approvals in Europe.
Lear Corp. carries a Zacks Rank #2.
Performance
Most auto stocks recorded gains over the last week. General Motors posted maximum loss among the stocks listed below, while Honda gained the most.
Over the last six months, Tesla, Inc. (TSLA - Free Report) was the biggest gainer, while AutoZone, Inc. (AZO - Free Report) was the worst performer.
Company
Last 1-Week Period
Last 6 Months
GM
-2.8%
+13.1%
F
+0.5%
+0.6%
TSLA
+5.2%
+14.4%
TM
-1.7%
-3.5%
HMC
+5.9%
+8.6%
HOG
+0.4%
+6.6%
AAP
+1.3%
-2.3%
AZO
+3.6%
-7.1%
Auto-Tires-Trucks Sector 5YR % Return
Auto-Tires-Trucks Sector 5YR % Return
What’s Next in the Auto Space?
While the Q4 earnings season is underway, none of the major auto sector companies are expected to report results over the coming week. Meanwhile, a few automakers are expected to report their Europe sales data for January soon.
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 >>