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Auto Stock Roundup: Honda, Autoliv, Goodyear, Cummins Top Earnings, Tesla Misses

Last week saw several a number of auto companies reporting results for the quarter ending on Sep 30, 2017. Two important companies which came up with results in the past week are Honda Motor Co., Ltd. HMC and Tesla, Inc. TSLA. While Honda registered better-than-expected earnings, Tesla’s loss per share was wider than the Zacks Consensus Estimate.

Tesla fell short of its third-quarter 2017 production goals of the new and affordable Model 3 sedan. This indicates that production has not been as smooth as anticipated. However, in its third-quarter results, the company has somewhat moderated its target production of Model 3.

On the other hand, auto companies which reported better-than-expected earnings are Autoliv, Inc. ALV, The Goodyear Tire & Rubber Company GT and Cummins Inc. CMI.

(Read the previous roundup here: Auto Stock Roundup for Oct 26, 2017)

Recap of the Week’s Most Important Stories

1.    Autoliv reported adjusted earnings of $1.47 per share in third-quarter 2017, beating the Zacks Consensus Estimate of $1.33. However, the bottom line came in 9.8% lower than the prior-year quarter figure.

During the quarter, Autoliv reported net sales of $2.5 billion, reflecting an increase of 1.6% year over year. Also, the top line came in slightly higher than the Zacks Consensus Estimate of $2.49 billion.

Operating income decreased 17% to $158.7 million from $191.1 million in the year-ago quarter. Adjusted operating margin was 7.9% in the reported quarter, lower than the prior-year quarter figure of 8.1% (read more: Autoliv Q3 Earnings Breeze Past Estimates, Down Y/Y).

Currently, Autoliv has a Zacks Rank #2 (Buy). You can see  the complete list of today’s Zacks #1 Rank stocks here.

2.    Goodyear Tire & Rubber reported 39.3% decrease in adjusted earnings per share to 71 cents in third-quarter 2017 compared with $1.17 registered a year ago. However, the bottom line surpassed the Zacks Consensus Estimate of 67 cents. Adjusted net income declined to $177 million from $310 million in third-quarter 2016.

Revenues in the reported quarter were $3.92 billion, marginally ahead of the Zacks Consensus Estimate of $3.91 billion. The top line also comfortably increased from $3.85 billion registered a year ago.

Tire unit volumes were 39.8 million, declining 5% from 2016. Replacement tire shipments fell 4%, while original equipment unit volume dipped 9% year over year due to lower volume sales.

Segment operating income dropped to $357 million in the reported quarter from $556 million a year ago (read more: Goodyear Q3 Earnings Beat Estimates, Down 39.3% Y/Y).

Goodyear Tire & Rubber Company has a Zacks Rank #5 (Strong Sell).

3.    Cummins reported earnings of $2.71 per share in the third quarter of 2017, increasing from $2.02 in the year-ago quarter. Also, the bottom line surpassed the Zacks Consensus Estimate of $2.47.

Net income came in at $453 million compared with $289 million in the third quarter of 2016.

Revenues improved 26.2% year over year to $5.29 billion in the reported quarter. This figure also outpaced the Zacks Consensus Estimate of $4.79 billion. The year-over-year increase was due to growth in demand for trucks and construction equipment in North America and China. Moreover, demand for products from global mining customers also increased.

Operating income increased to $629 million from $384 million a year ago. Earnings before interest and taxes (EBIT) were $640 million (12.1% of sales) compared with $398 million (9.5% of sales) a year ago (read more: Cummins Q3 Earnings Beat Estimates, Outlook Raised).

Currently, Cummins has a Zacks Rank #2.

4.    Honda reported consolidated income of ¥174 billion ($1.54 billion) or ¥96.6 per share (86 cents per ADR) in the second quarter of fiscal 2018 (ended Sep 30, 2017). Earnings per share surpassed the Zacks Consensus Estimate of 49 cents.
 
Consolidated sales revenues increased 15.7% year over year to ¥3.78 trillion ($33.5 billion). The figure surpassed the Zacks Consensus Estimate of $31.4 billion. The year-over-year increase can be attributed to higher revenues in all business operations and a positive foreign currency conversion effects.

Consolidated operating profit amounted to ¥152.9 billion ($1.36 billion), reflecting a decrease of 32.9% from the prior-year quarter. The decline was due to the loss pertaining to the settlement of litigation and the reverse impact of pension plan amendment. These factors were offset by lower selling, general and administrative (SG&A) expenses, and a rise in sales volumes and model mix (read more: Honda Drives Past Q2 Earnings and Revenue Estimates).

Currently, Honda has a Zacks Rank #4 (Sell).

5.    Tesla's adjusted loss was $2.92 per share in the third quarter of 2017. The loss was wider than the Zacks Consensus Estimate of a loss of $2.45. The prior-year quarter earnings were 70 cents per share.

Reported net loss in the quarter was $671.2 million against net income of $21.9 million a year ago.

During the quarter, revenues increased to $2.98 billion from $2.30 billion registered in third-quarter 2016. The figure also surpassed the Zacks Consensus Estimate of $2.92 billion.

Tesla delivered 26,137 vehicles in the third quarter of 2017. In third-quarter 2017, the combined sales of Model S and Model X grew 4.5% from the year-ago figure.

Tesla currently carries a Zacks Rank #5.

Performance

CompanyLast WeekLast 6 Months
GM-4.4%28.8%
F2.6%11.6%
TSLA-1.5%3.2%
TM1.7%14.3%
HMC4.6%10.2%
HOG-2.2%-14%
AAP-3.1%-43.5%
AZO-0.4%-16.1%


Last week, the steepest increase was registered by Honda and the sharpest decline was witnessed by General Motors Company GM.

In the last six months, the steepest increase and the sharpest decline were witnessed by General Motors and Advance Auto Parts, Inc. AAP, respectively.

What’s Next in the Auto Space?

Third-quarter 2017 earnings season is not yet over. Watch out for the earnings releases of other auto companies over the next week.

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General Motors Company (GM): Free Stock Analysis Report
 
Tesla Inc. (TSLA): Free Stock Analysis Report
 
Honda Motor Company, Ltd. (HMC): Free Stock Analysis Report
 
Advance Auto Parts Inc (AAP): Free Stock Analysis Report
 
Autoliv, Inc. (ALV): Free Stock Analysis Report
 
Cummins Inc. (CMI): Free Stock Analysis Report
 
The Goodyear Tire & Rubber Company (GT): Free Stock Analysis Report
 
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