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Auto Stocks' Q2 Earnings Queued for Jul 25: GM, PCAR, WNC

The second-quarter 2017 earnings season for the auto sector is in full swing. Some important companies which have already reported results include Harley-Davidson, Inc. HOG, Genuine Parts Company GPC and Autoliv, Inc. ALV. While both Genuine Parts Company and Autoliv missed on earnings, Harley-Davidson beat earnings.

Three important companies expected to come up with their results on Jul 25 are General Motors Company GM, PACCAR Inc PCAR and Wabash National Corporation WNC.

Per the latest Earnings Outlook, as of Jul 19, 54 companies from the S&P 500 category have already announced their results. These companies, as a whole, recorded earnings and revenues beat ratios of 79.6% and 72.2%, respectively. As of that date, 10% companies from the Auto, Tires and Trucks sector have reported earnings for the quarter ended Jun 30, 2017.

However, second-quarter 2017 earnings and revenue growth for auto companies are expected to be in the negative territory. Auto stocks are expected to register 10.3% and 0.8% year-over-year decline in earnings and revenues, respectively. However, the S&P 500 companies, as a whole, are expected to record 7.2% and 4.5% year-over-year growth in earnings and revenues, respectively, during the quarter.

Of late, the auto sector is going through a tough time. The problem of high level of inventory is adversely affecting auto companies.

General Motors has lowered the outlook for new vehicle sales in the U.S. in 2017. This is an indication of the industry heading for a moderate downturn in 2017. Also, safety recalls, plans of exiting the NAFTA treaty and implementation of tariffs will have some negative effects on auto companies.

That said, let’s take a look at the three auto companies scheduled to announce their results tomorrow.

We relied on the Zacks methodology, combining a favorable Zacks Rank – Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) – and a positive Earnings ESP, to predict the chances of a beat this quarter.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Per our proprietary methodology, Earnings ESP shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Research shows that with this combination of rank and ESP, chances of a positive earnings surprise are as high as 70% for the stocks.

Detroit, MI-based General Motors is a leading global automotive company. Our model does not conclusively predict that the company is likely to deliver a positive surprise as it currently has an Earnings ESP of -1.16% and a Zacks Rank #5 (Strong Sell). (Read more: Will General Motors Stock Disappoint in Q2 Earnings?).

Headquartered in Bellevue, WA, PACCAR Inc. is the third largest manufacturer of heavy-duty trucks in the world and has substantial manufacturing exposure to light/medium trucks. Per our model, the company is likely to deliver a positive earnings surprise, as it currently has an Earnings ESP of +6.06% and a Zacks Rank #2. (Read more: Will PACCAR Beat on Estimates This Earnings Season?).

PACCAR Inc. Price and EPS Surprise

PACCAR Inc. Price and EPS Surprise | PACCAR Inc. Quote

Lafayette, IN-based Wabash National Corporation is a leading manufacturer of semi trailers in North America. The company is likely to deliver a positive surprise as it currently has an Earnings ESP of 0.00% and a Zacks Rank #3.

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PACCAR Inc. (PCAR): Free Stock Analysis Report
General Motors Company (GM): Free Stock Analysis Report
Autoliv, Inc. (ALV): Free Stock Analysis Report
Wabash National Corporation (WNC): Free Stock Analysis Report
Genuine Parts Company (GPC): Free Stock Analysis Report
Harley-Davidson, Inc. (HOG): Free Stock Analysis Report
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