Auto ETF in Focus Post Quarterly Results
Per the Earnings Trends issued on Oct 31, 2018, auto stocks have reflected 13% year-over-year earnings growth on 6.6% rise in revenues. The growth and earnings rates seem unimpressive when compared with some of the other sectors. Earnings and revenue beat ratios are 55.6% and 66.7%, respectively (see: all the Consumer Discretionary ETFs).
Ford Motor F, General Motors GM, Toyota Motor Corporation TM and Honda Motor HMC reported their quarterly results on Oct 24, Oct 30, Nov 6, and Nov 7, respectively. Ford’s earnings were in line with the Zacks Consensus Estimate, while General Motors, Honda Motor and Toyota Motor topped the estimates. Revenue estimates were missed by Toyota Motor and Honda Motor.
Earnings in Focus
Ford Motor
Ford’s earnings came in at 29 cents, down 32.6% year over year and in line with the Zacks Consensus Estimate. Its revenues of $34.7 billion were 3.3% higher than the year-ago period. Revenues also beat the Zacks Consensus Estimate by 8.14%. Ford has a Zacks ETF Rank #3 (Hold) and VGM Score of A.
For 2018, the company reaffirmed its guidance for adjusted EPS in the range of $1.30-$1.50 (read: Top ETF Stories of October).
General Motors
General Motors reported earnings of $1.65 per share, beating the Zacks Consensus Estimate by 61 cents. Earnings improved 41.7% year over year. Revenues came in at $35.8 billion, beating Zacks Consensus Estimate by 4.6% and increasing 6.4% year over year. It carries a Zacks ETF Rank #2 (Buy) and has a VGM Score of A.
Toyota Motor
Toyota Motor reported earnings of $3.59, which came ahead of the Zacks Consensus Estimate of $3.17 and surged 30.1% year over year. Revenues were $65.59 billion, which missed the Zacks Consensus Estimate of $66.83 billion. Revenues increased 1.8% year over year. It has a Zacks ETF Rank #3 and Value Score of A.
Honda Motor
Honda Motor reported earnings of $1.07, beating the Zacks Consensus Estimate of 79 cents and increasing 24.4% from the year-ago quarter. Revenues were $34.46 billion, which missed the Zacks Consensus Estimate of $34.6 billion. Revenues increased 2.9% year over year. Honda has a Zacks ETF Rank #3 and VGM Score of A.
For fiscal 2019 (ended Mar 31, 2019), Honda expects revenues to increase 2.9% to ¥15.8 trillion.
Auto ETF in Focus
U.S. auto sector has experienced a hard year due to higher interest rates and rising cost of vehicles caused by trade war tensions. U.S. auto companies supposedly earn nearly 12% of revenues from Beijing. Recently, there was a surge in First Trust NASDAQ Global Auto Index Fund (CARZ) post news that Chinese regulators are considering a 50% cut in the nation’s auto tax to 5%, applicable on cars whose engines are not bigger than 1.6 litres.
Below we highlight this auto ETF with wide exposure to the above mentioned companies (read: (What'll Impact Auto ETF Ahead: China Stimulus or Trade Worry?).
CARZ
The fund tracks the NASDAQ OMX Global Auto Index providing exposure to the global automotive sector. It comprises 35 holdings with General Motors (8.7%) and Honda Motor (8.1%) occupying the top two positions and Toyota Motor (7.8%) alongside Ford (7.8%) occupying the fourth and fifth spots, respectively. Its AUM is $17.2 million and expense ratio is 0.70%. The fund has lost 0.6% over the past month and 19.5% year to date (as of Nov 13, 2018) and carries a Zacks ETF Rank #3 (Hold) with a High risk outlook.
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General Motors Company (GM) : Free Stock Analysis Report
Ford Motor Company (F) : Free Stock Analysis Report
Toyota Motor Corporation (TM) : Free Stock Analysis Report
Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report
FT-NDQ GL AUTO (CARZ): ETF Research Reports
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