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Auto Stock Roundup: Toyota Beats on Earnings, Tesla Acquires German Company
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With most of the Q3 earnings season behind us, Toyota Motor Corporation (TM - Free Report) was the only major auto sector company to post results over the week. Tesla Motors, Inc. (TSLA - Free Report) announced an acquisition, while Winnebago Industries, Inc. (WGO - Free Report) completed a previously announced buyout.
Further, Ford Motor Co. (F - Free Report) and General Motors Co. (GM - Free Report) announced record October sales volumes in China. General Motors also announced some investment and production plans.
1. Toyota recorded earnings of ¥128.54 per share ($2.51 per ADR) in second-quarter (ended Sep 30, 2016) fiscal 2017, down from ¥192.51 per share ($3.16 per ADR) earned in second-quarter (ended Sep 30, 2015) fiscal 2016. Earnings per ADR surpassed the Zacks Consensus Estimate of $2.12. Consolidated revenues decreased 8.6% year over year to ¥6.48 trillion ($63.32 billion). The figure also missed the Zacks Consensus Estimate of $64.56 billion.
Net earnings for fiscal 2017 are expected at around ¥1.55 trillion ($15 billion), up from the prior view of ¥1.45 trillion ($14.2 billion). The net income guidance reflects expectation of a 33% decrease over fiscal 2016 (read more: Toyota Q2 Earnings Beat, Revenues Lag Estimates).
Toyota carries a Zacks Rank #4 (Sell).
2. Tesla announced that it has agreed to buy Grohmann Engineering, a German automated manufacturing specialist. The company will be renamed Tesla Grohmann Automation and should play an integral role in helping Tesla reach its increased production capacity goals. Tesla expects the deal to close by early 2017. Upon approval, its new operations in Germany will bring over 1,000 advanced engineering and skilled technician jobs to the country over the next two years (read more: Here's Why Tesla Just Bought a German Engineering Firm).
Tesla currently carries a Zacks Rank #3 (Hold).
3. General Motors announced that it will invest over $900 million in three U.S. facilities for future vehicle programs. These facilities are the Toledo Transmission Operations in Ohio, Lansing Grand River in Michigan and Bedford Casting Operations in Indiana.
The company will also suspend the third shift of production at the Lordstown, OH, and Lansing Grand River, MI assembly plants in the first quarter of 2017. This is being done to align production with demand for cars built at these facilities.
Currently, General Motors has a Zacks Rank #2 (Buy).
4. Winnebago has completed the acquisition of privately held towable recreation vehicles (RVs) producer, Grand Design Recreational Vehicle Company, for roughly $500 million. With this deal, which was announced last month, Winnebago intends to increase its presence in the towables business as well as diversify its portfolio with this merger.
5. Ford and General Motors reported their respective China sales figures for Oct 2016. General Motors and its joint ventures in China reported a 5.7% year-over-year increase in deliveries to a record 345,733 vehicles. Meanwhile, Ford’s sales in China increased 14% year over year to 107,618 units during the period, which is an October record for the company.
Performance
The companies in the auto sector recorded mixed performance last week. General Motors and Honda Motor Co., Ltd. (HMC - Free Report) lost the most during the week, while Ford was the biggest loser over the last six months.
Meanwhile, Harley-Davidson, Inc. (HOG - Free Report) gained the most over both the short and longer terms.
A few auto companies, including Advance Auto Parts and Tata Motors, will release their financial results in the coming week.
Further, some automakers will report their Europe sales for October in the coming days.
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Auto Stock Roundup: Toyota Beats on Earnings, Tesla Acquires German Company
With most of the Q3 earnings season behind us, Toyota Motor Corporation (TM - Free Report) was the only major auto sector company to post results over the week. Tesla Motors, Inc. (TSLA - Free Report) announced an acquisition, while Winnebago Industries, Inc. (WGO - Free Report) completed a previously announced buyout.
Further, Ford Motor Co. (F - Free Report) and General Motors Co. (GM - Free Report) announced record October sales volumes in China. General Motors also announced some investment and production plans.
(Read the previous roundup here: Auto Stock Roundup for Nov 3, 2016)
Recap of the Week’s Most Important Stories
1. Toyota recorded earnings of ¥128.54 per share ($2.51 per ADR) in second-quarter (ended Sep 30, 2016) fiscal 2017, down from ¥192.51 per share ($3.16 per ADR) earned in second-quarter (ended Sep 30, 2015) fiscal 2016. Earnings per ADR surpassed the Zacks Consensus Estimate of $2.12. Consolidated revenues decreased 8.6% year over year to ¥6.48 trillion ($63.32 billion). The figure also missed the Zacks Consensus Estimate of $64.56 billion.
Net earnings for fiscal 2017 are expected at around ¥1.55 trillion ($15 billion), up from the prior view of ¥1.45 trillion ($14.2 billion). The net income guidance reflects expectation of a 33% decrease over fiscal 2016 (read more: Toyota Q2 Earnings Beat, Revenues Lag Estimates).
Toyota carries a Zacks Rank #4 (Sell).
2. Tesla announced that it has agreed to buy Grohmann Engineering, a German automated manufacturing specialist. The company will be renamed Tesla Grohmann Automation and should play an integral role in helping Tesla reach its increased production capacity goals. Tesla expects the deal to close by early 2017. Upon approval, its new operations in Germany will bring over 1,000 advanced engineering and skilled technician jobs to the country over the next two years (read more: Here's Why Tesla Just Bought a German Engineering Firm).
Tesla currently carries a Zacks Rank #3 (Hold).
3. General Motors announced that it will invest over $900 million in three U.S. facilities for future vehicle programs. These facilities are the Toledo Transmission Operations in Ohio, Lansing Grand River in Michigan and Bedford Casting Operations in Indiana.
The company will also suspend the third shift of production at the Lordstown, OH, and Lansing Grand River, MI assembly plants in the first quarter of 2017. This is being done to align production with demand for cars built at these facilities.
Currently, General Motors has a Zacks Rank #2 (Buy).
4. Winnebago has completed the acquisition of privately held towable recreation vehicles (RVs) producer, Grand Design Recreational Vehicle Company, for roughly $500 million. With this deal, which was announced last month, Winnebago intends to increase its presence in the towables business as well as diversify its portfolio with this merger.
Winnebago currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
5. Ford and General Motors reported their respective China sales figures for Oct 2016. General Motors and its joint ventures in China reported a 5.7% year-over-year increase in deliveries to a record 345,733 vehicles. Meanwhile, Ford’s sales in China increased 14% year over year to 107,618 units during the period, which is an October record for the company.
Performance
The companies in the auto sector recorded mixed performance last week. General Motors and Honda Motor Co., Ltd. (HMC - Free Report) lost the most during the week, while Ford was the biggest loser over the last six months.
Meanwhile, Harley-Davidson, Inc. (HOG - Free Report) gained the most over both the short and longer terms.
Company
Last 1-Week Period
Last 6 Months
GM
-1.6%
-1.2%
F
+1.6%
-14.2%
TSLA
+1.1%
-8.9%
TM
-1.4%
+6.7%
HMC
-1.6%
-1.1%
HOG
+5.0%
+26.7%
AAP
+1.6%
-7.9%
AZO
+0.4%
-6.1%
Auto-Tires-Trucks Sector Price Index
Auto-Tires-Trucks Sector Price Index
What’s Next in the Auto Space?
A few auto companies, including Advance Auto Parts and Tata Motors, will release their financial results in the coming week.
Further, some automakers will report their Europe sales for October in the coming days.
Confidential: Zacks' Best Investment Ideas
Would you like to see a hand-picked "all-star" selection of investment ideas from the man who heads up Zacks' trading and investing services? Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand.Click for his selected trades right now >>