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Auto Stock Roundup: CNHI & LAD Beat on Earnings, GT, ADNT & PAG Miss on Both Counts

Zacks Equity Research

In the past week, some companies from the Auto sector — including The Goodyear Tire & Rubber Company GT, Adient plc ADNT, Penske Automotive Group, Inc. PAG, CNH Industrial N.V. (CNHI) and Lithia Motors, Inc. LAD — have reported quarterly results. During the quarter under review, earnings and revenues for CNH Industrial and Lithia Motors beat the Zacks Consensus Estimate. On the other hand, earnings and revenues for Goodyear Tire, Adient and Penske Automotive missed the Zacks Consensus Estimate.

Recap of the Week’s Most Important Stories

1.    Goodyear Tire reported adjusted earnings of 51 cents per share in fourth-quarter 2018 compared with 99 cents in the prior-year quarter.

The bottom line missed the Zack Consensus Estimate of 60 cents. The company reported net income of $110 million against net loss of $96 million in the year-ago quarter.

The company delivered net revenues of $3.88 billion, lower than $4.07 billion in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.93 billion. During the quarter under review, revenues were impacted by lower volume and currency fluctuations. These were partly offset by improvement in price/mix.

During the reported quarter, tire unit volume was 40.7 million, down 3% from the year-ago quarter. Replacement tire shipments were nearly flat while original equipment unit volume fell 10% from the prior-year quarter.

Segmental operating income was $307 million, down from $430 million in fourth-quarter 2017.

For 2018, adjusted earnings were $2.32 per share, down from $3.12 in 2017.

Revenues in 2018 were $15.5 billion, up 1% from the 2017 figure. (Read more: Goodyear Earnings Miss Estimates in Q4, Decrease Y/Y)

Goodyear Tire currently carries a Zacks Rank #5 (Strong Sell).

2.    Adient reported first-quarter fiscal 2019 adjusted earnings of 31 cents per share, missing the Zacks Consensus Estimate of 48 cents. The adjusted bottom-line figure in the year-ago quarter was $1.05 per share. The decline was due to negative business performance, owing to launch inefficiencies.

During the quarter under review, Adient reported net sales of $4.16 billion, a decline from $4.2 billion recorded in first-quarter fiscal 2018. Further, the top line missed the Zacks Consensus Estimate of $4.17 billion.

Net income attributed to Adient was $17 million against net loss of $216 million in the prior-year quarter.

During the reported quarter, the Seating segment of the company reported net sales of $3.7 billion, down from $3.8 billion in first-quarter fiscal 2018. The segment’s adjusted EBIDTA was $261 million compared with $354 million recorded in the prior-year quarter.

The Seat Structures & Mechanisms (SS&M) segment reported net sales of $727 million, up from $718 million in the prior-year quarter. Adjusted EBITDA for this segment amounted to negative $72 million compared with negative $82 million in the first quarter of the previous fiscal year. (Read more: Adient Misses Q1 Earnings Estimates, Shares Down)

Adient currently carries a Zacks Rank #5.

3.    Penske Automotive recorded adjusted earnings of $1.11 per share in fourth-quarter 2018, missing the Zacks Consensus Estimate of $1.16. It recorded adjusted earnings of $1.01 per share in the year-ago quarter.

Adjusted income from continuing operations increased 9.6% to $94.9 million in the reported quarter from $86.6 million a year ago.

Total revenues rose 0.8% year over year to $5.44 billion, missing the Zacks Consensus Estimate of $5.46 billion. The decline was due to a shortage in the availability of products and delay in Worldwide Harmonized Light Vehicle Testing ("WLTP") certification for the company’s businesses in western Europe.

Same-store retail unit sales decreased 2.3% year over year to 113,547. Within the retail automotive segment, new-vehicle revenues declined 5.9% year over year to $2.3 billion while used-vehicle revenues gained 8.3% to $1.7 billion.

The company’s gross profit increased to $852.6 million from $808.1 million in the prior-year quarter. During the quarter under review, operating income grew 0.3% to $136.6 million. (Read more: Penske Automotive Misses Earnings Estimates in Q4)

Penske Automotive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

4.    CNH Industrial reported adjusted earnings of 21 cents per share in fourth-quarter 2018, increasing from 13 cents in the prior-year quarter. Moreover, the bottom line surpassed the Zacks Consensus Estimate of 15 cents.

Reportedly, adjusted net income rose to $294 million from $190 million recorded in fourth-quarter 2017.

Consolidated revenues declined 0.3% from the year-ago quarter to $8.2 billion. However, the figure surpassed the Zacks Consensus Estimate of $8.08 billion. The company’s net sales for Industrial Activities were $7.7 billion and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $690 million.

In 2018, the company’s adjusted net income was $1.12 billion and adjusted earnings were 80 cents per share.

Consolidated revenues for the year went up 7.2% year over year to $29.71 billion. (Read more: CNH Industrial Q4 Earnings Beat Estimates, Gain Y/Y)

CNH Industrial currently carries a Zacks Rank #3.

5.    Lithia Motors reported adjusted earnings of $2.57 per share in fourth-quarter 2018, increasing from $2.15 in the prior-year quarter. Further, the bottom line beat the Zacks Consensus Estimate of $2.42.

In the quarter under review, adjusted net income rose 12% year over year to $61 million. Total revenues in the quarter increased 10% year over year to $2.97 billion, beating the Zacks Consensus Estimate of $2.94 billion.

Gross profit increased over 11.6% to $441.9 million in the quarter under review from $396.1 million in the year-ago quarter.

Revenues from new-vehicle retail rose 4.5% year over year to $1.7 billion in the reported quarter. New-vehicle retail sales volume expanded 0.2% to 45,287 units. The average selling price for new-vehicle retail sales rose 4.3% to $37,281 from the year-ago figure.

Used-vehicle retail revenues increased 19.7% year over year to $753.4 million in the quarter under review while the same for used-vehicle wholesale rose 9.8% to $78.1 million. Used-vehicle retail sales volume improved 12.5% to 36,273 units. The average selling price of used-vehicle retail sales gained 6.4% to $ 20,771 million from the year-ago figure.

Revenues from service body and parts went up 15.6% to $314 million. The company’s finance and insurance business recorded 9.3% rise in revenues to $112.8 million.

Revenues from fleet and others were $26.7 million compared with the year-ago figure of $12.2 million.

Lithia Motors currently carries a Zacks Rank #3.

Performance

In the last week, Advance Auto Parts, Inc. AAP gained the maximum while Ford Motor Company F declined the most.

In the past six months, AutoZone, Inc. AZO has increased the most. Harley-Davidson, Inc. HOG and Ford declined the most.

Company Last Week Last 6 Months
GM -2.3% 8.5%
F -3.6% -11%
TSLA -2.9% -9%
TM -1.2% -1.8%
HMC -1.8% -8.2%
HOG 0.3% -11%
AAP 5.9% 5.3%
AZO 2.7% 18.5%


What’s Next in the Auto Space?

Watch out for the usual news releases and earnings releases over the next week.

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Penske Automotive Group, Inc. (PAG) : Free Stock Analysis Report
 
Lithia Motors, Inc. (LAD) : Free Stock Analysis Report
 
Ford Motor Company (F) : Free Stock Analysis Report
 
Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report
 
AutoZone, Inc. (AZO) : Free Stock Analysis Report
 
Adient PLC (ADNT) : Free Stock Analysis Report
 
Harley-Davidson, Inc. (HOG) : Free Stock Analysis Report
 
The Goodyear Tire & Rubber Company (GT) : Free Stock Analysis Report
 
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