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Auto Stock Roundup: Volkswagen Emission Fix Approved; GM, Ford Post China Sales
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Volkswagen AG has finally received the approval for its proposed fixing of some emissions-rigged vehicles in Europe. Meanwhile, Thor Industries Inc. (THO - Free Report) reported that its third-quarter fiscal 2016 earnings and revenues increased year over year. While the company’s earnings surpassed the Zacks Consensus Estimate, revenues were nearly in line.
General Motors Company (GM - Free Report) and Ford Motor Co. (F - Free Report) reported their China sales figures for May. While General Motors witnessed a strong rise in sales, Ford’s volumes for the month declined year over year. Further, Tata Motors Limited reported that its global wholesales increased 10% year over year in May 2016.
1. Volkswagen has received approval from the German motor vehicle agency, KBA to recall and repair 800,000 of its vehicles, per sources. This will be a significant step toward solving its emissions problem. Last year, Volkswagen admitted that its diesel vehicles are installed with a software that makes the engines appear to have low emission levels during tests. Approvals for repairing the vehicles have been granted for European versions of the Volkswagen Passat, CC coupes and Eos convertible models with 2-liter engines. These vehicles can be repaired simply by updating the manipulating software (read more: Volkswagen's Emissions Fix Approved for Some Models).
2. Thor Industries reported third-quarter fiscal 2016 (ended Apr 30, 2016) earnings of $1.51 per share that surpassed the Zacks Consensus Estimate of $1.45. Earnings also increased 26.9% from $1.19 per share recorded in the third quarter of fiscal 2015. Revenues rose 9.4% year over year to $1.28 billion and were almost in line with the Zacks Consensus Estimate. The year-over-year improvement was driven by higher sales of towable and motorized RVs, along with benefits from the acquisition of Postle Aluminum Co (read more: Thor Industries Q3 Earnings Beat Estimates, Rise Y/Y).
3. General Motors and its joint ventures in China reported a 16.9% year-over-year increase in retail sales in May 2016, taking the figure to 295,282 vehicles. The improved performance was driven by strong demand for SUVs, MPVs and luxury vehicles, along with notable demand for passenger car models like Buick Excelle GT. The Buick, Cadillac and Baojun brands, and SUV lineup recorded all-time high deliveries in May (read more: General Motors' China Sales Surge 16.9% Y/Y in May).
4. Ford’s China sales declined 2.6% year over year to 88,248 vehicles in May 2016. However, the automaker witnessed a 5% year-over-year increase in sales in the world’s largest automobile market to 479,542 vehicles in the first five months of 2016.
5. Tata Motors reported that its global wholesales, inclusive of the Jaguar Land Rover, increased 10% year over year to 87,414 vehicles in May 2016. Cumulative global wholesales for April and May 2016 were 168,711 vehicles, up 8% from the year-ago figure.
Performance
Most auto sector companies had a positive run on the stock market last week. Tesla Motors, Inc. (TSLA - Free Report) was leading the gainers with a sturdy 7.3% rise over the last five trading sessions. The impressive gain was driven by billionaire investor Ron Baron’s revelation that he has invested $300 million in the electric carmaker and expectation of generating profits of $6–$7 billion from the investment in the coming 10–15 years. The highly bullish comments from Baron pulled up Tesla’s stock price by 5.3% in a single trading session. This bull run also made Tesla the largest gainer over the last six months.
Meanwhile, Honda Motor Co., Ltd. (HMC - Free Report) was the biggest loser among the stocks listed below over the last week. General Motors lost the most over the longer term.
Company
Last 1-Week Period
Last 6 Months
GM
-0.9%
-16.6%
F
+1.9%
-3.8%
TSLA
+7.3%
+4.9%
TM
+2.2%
-14.7%
HMC
-1.3%
-15.0%
HOG
+0.3%
+0.5%
AAP
+0.1%
+0.2%
AZO
+0.0%
-3.0%
What’s Next in the Auto Space?
A few automakers may announce their Europe sales figures for May in the coming week.
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Auto Stock Roundup: Volkswagen Emission Fix Approved; GM, Ford Post China Sales
Volkswagen AG has finally received the approval for its proposed fixing of some emissions-rigged vehicles in Europe. Meanwhile, Thor Industries Inc. (THO - Free Report) reported that its third-quarter fiscal 2016 earnings and revenues increased year over year. While the company’s earnings surpassed the Zacks Consensus Estimate, revenues were nearly in line.
General Motors Company (GM - Free Report) and Ford Motor Co. (F - Free Report) reported their China sales figures for May. While General Motors witnessed a strong rise in sales, Ford’s volumes for the month declined year over year. Further, Tata Motors Limited reported that its global wholesales increased 10% year over year in May 2016.
(Read the previous roundup here: Auto Stock Roundup for Jun 3, 2016)
Recap of the Week’s Most Important Stories
1. Volkswagen has received approval from the German motor vehicle agency, KBA to recall and repair 800,000 of its vehicles, per sources. This will be a significant step toward solving its emissions problem. Last year, Volkswagen admitted that its diesel vehicles are installed with a software that makes the engines appear to have low emission levels during tests. Approvals for repairing the vehicles have been granted for European versions of the Volkswagen Passat, CC coupes and Eos convertible models with 2-liter engines. These vehicles can be repaired simply by updating the manipulating software (read more: Volkswagen's Emissions Fix Approved for Some Models).
2. Thor Industries reported third-quarter fiscal 2016 (ended Apr 30, 2016) earnings of $1.51 per share that surpassed the Zacks Consensus Estimate of $1.45. Earnings also increased 26.9% from $1.19 per share recorded in the third quarter of fiscal 2015. Revenues rose 9.4% year over year to $1.28 billion and were almost in line with the Zacks Consensus Estimate. The year-over-year improvement was driven by higher sales of towable and motorized RVs, along with benefits from the acquisition of Postle Aluminum Co (read more: Thor Industries Q3 Earnings Beat Estimates, Rise Y/Y).
3. General Motors and its joint ventures in China reported a 16.9% year-over-year increase in retail sales in May 2016, taking the figure to 295,282 vehicles. The improved performance was driven by strong demand for SUVs, MPVs and luxury vehicles, along with notable demand for passenger car models like Buick Excelle GT. The Buick, Cadillac and Baojun brands, and SUV lineup recorded all-time high deliveries in May (read more: General Motors' China Sales Surge 16.9% Y/Y in May).
4. Ford’s China sales declined 2.6% year over year to 88,248 vehicles in May 2016. However, the automaker witnessed a 5% year-over-year increase in sales in the world’s largest automobile market to 479,542 vehicles in the first five months of 2016.
5. Tata Motors reported that its global wholesales, inclusive of the Jaguar Land Rover, increased 10% year over year to 87,414 vehicles in May 2016. Cumulative global wholesales for April and May 2016 were 168,711 vehicles, up 8% from the year-ago figure.
Performance
Most auto sector companies had a positive run on the stock market last week. Tesla Motors, Inc. (TSLA - Free Report) was leading the gainers with a sturdy 7.3% rise over the last five trading sessions. The impressive gain was driven by billionaire investor Ron Baron’s revelation that he has invested $300 million in the electric carmaker and expectation of generating profits of $6–$7 billion from the investment in the coming 10–15 years. The highly bullish comments from Baron pulled up Tesla’s stock price by 5.3% in a single trading session. This bull run also made Tesla the largest gainer over the last six months.
Meanwhile, Honda Motor Co., Ltd. (HMC - Free Report) was the biggest loser among the stocks listed below over the last week. General Motors lost the most over the longer term.
Company
Last 1-Week Period
Last 6 Months
GM
-0.9%
-16.6%
F
+1.9%
-3.8%
TSLA
+7.3%
+4.9%
TM
+2.2%
-14.7%
HMC
-1.3%
-15.0%
HOG
+0.3%
+0.5%
AAP
+0.1%
+0.2%
AZO
+0.0%
-3.0%
What’s Next in the Auto Space?
A few automakers may announce their Europe sales figures for May in the coming week.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>