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Auto Stock Roundup: Q2 Earnings Beat at ALV, HOG, AN; Miss at PCAR & TSLA

Zacks Equity Research

Several Auto sector companies have reported second-quarter 2019 earnings in the past week, including Autoliv, Inc. ALV, PACCAR Inc. PCAR, Harley-Davidson, Inc. HOG, AutoNation Inc. AN and Tesla, Inc. TSLA.

Autoliv, Harley-Davidson and AutoNation delivered an earnings beat while PACCAR and Tesla reported a miss. On a year-over-year basis, PACCAR and Tesla’s earnings improved while that of Autoliv, Harley-Davidson and AutoNation declined.

Recap of the Week’s Most Important Stories

1. Autoliv reported adjusted earnings of $1.38 per share in second-quarter 2019, beating the Zacks Consensus Estimate of $1.37. However, the bottom line declined from the prior-year quarter figure of $2.22.

During the quarter under review, the company reported net sales of $2.16 billion, reflecting a 2.6% year-over-year decline. The figure was almost in line with the Zacks Consensus Estimate. During the quarter under review, the company’s profitability was strained by high raw material expenses and a steep decline in LVP.

Operating income declined 26% year over year to $170 million. Adjusted operating margin from continuing operations was 8.5% in the reported quarter, lower than the prior-year quarter figure of 10.4%.

Autoliv had cash and cash equivalents of $406.4 million as of Jun 30, 2019, lower than $436.6 million reported as of Mar 31, 2019. Long-term debt was $1.85 billion as of Jun 30, 2019, witnessing an increase from $1.6 billion as of Mar 31, 2019.

Net capital expenditure increased to $127.8 million from the year-ago figure of $125.2 million.

For 2019, Autoliv’s organic sales growth is projected to be 1-3%, down from around 5% mentioned earlier. Consolidated sales growth is expected to be between negative 1% and positive 1%. The same was pegged at a positive 3% in the previous guidance. Further, adjusted operating margin is projected to be 9-9.5%, down from about 10.5% stated earlier. (Read more: Autoliv Earnings Beat Estimates in Q2, Decline Y/Y)

Currently, Autoliv has a Zacks Rank #5 (Strong Sell).

2. PACCAR’s second-quarter 2019 earnings were $1.78 per share, missing the Zacks Consensus Estimate of $1.81. In second-quarter 2018, the company’s earnings per share were $1.59. The year-over-year improvement can be attributed to a record truck delivery and part sales.

The company posted quarterly consolidated net sales and revenues of $6.63 billion, up from the prior-year quarter figure of $5.81 billion.

The pre-tax revenues from the Truck, Parts and Other segment increased to $713.3 million from $632.6 million recorded a year ago.

Revenues from the Financial Services segment rose to $80.3 million from $72.4 million a year ago. Pre-tax income increased to $814.4 million from $719.6 million in the year-ago quarter.

PACCAR’s cash and marketable debt securities amounted to $4.18 billion as of Jun 30, 2019, compared with $4.30 billion as of Dec 31, 2018.

In the United States and Canada, Class 8 truck industry retail units sold rose 20% year over year. For 2019, the Class 8 truck industry retail unit sale in the United States and Canada is anticipated to rise to 300,000-320,000 from the previously mentioned 295,000-315,000. (Read more: PACCAR Earnings Miss Estimates in Q2, Improve Y/Y)

Currently, PACCAR has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


3. Harley-Davidson delivered earnings per share of $1.23 in second-quarter 2019, which surpassed the Zacks Consensus Estimate of $1.22. In the prior-year quarter, the figure amounted to $1.45 per share.

The company’s net income amounted to $195.6 million compared with $242.3 million in the year-ago quarter.

Revenues in the Motorcycle and Related Products segment declined 6% year over year to $1.43 billion in the reported quarter, which missed the Zacks Consensus Estimate of $1.45 billion. Segmental revenues amounted to $1.53 billion in the year-ago quarter. The company reported consolidated revenues of $1.63 billion, which declined from the prior-year quarter’s number of $1.71 billion. This downside was primarily caused by declining worldwide retail unit sale.

In the second quarter, operating income from the Motorcycles and Related Products segment amounted to $180.7 million compared with $243.4 million in the year-ago quarter. This decline primarily resulted from a decline in revenues and higher tariff costs, partially offset by lower SG&A.

In the quarter ending Jun 30, 2019, the company shipped 68,757 motorcycles compared with 72,593 units in second-quarter 2018.

Harley-Davidson’s retail motorcycle units sold in the United States declined 8% to 42,762. International units sold fell 8.9% to 29,084 motorcycles from 31,938 units in the prior-year quarter. During the reported quarter, the company witnessed sales decline across all the markets. Sales in the Europe Middle East and Africa (EMEA), the Asia Pacific, Latin America, and Canada declined 12.5%, 0.6%, 2.1% and 13.9%, respectively.

Harley-Davidson’s worldwide retail motorcycle units sold declined 8.4% to 71,846 from 78,428 in the year-ago quarter.

Revenues in the Parts & Accessories segment fell 4.2% to $221.3 million. Moreover, the metric for General Merchandise — including Motor Clothes apparel and accessories — fell 5.8% to $64.6 million. (Read more: Harley-Davidsons Q2 Earnings Beat Estimates, Down Y/Y)

Currently, Harley-Davidson has a Zacks Rank #3.

4. AutoNation delivered second-quarter 2019 adjusted earnings of $1.20 per share, which beat the Zacks Consensus Estimate of $1.08. In the year-ago quarter, its earnings were $1.14 per share.

Net income from continuing operations was $101 million compared with $97 million in second-quarter 2018.

During the quarter under review, AutoNation’s revenues amounted to $5.34 billion compared with $5.39 billion in the prior-year quarter. However, the top line surpassed the Zacks Consensus Estimate of $5.32 billion.

During the quarter, new-vehicle revenues declined 6.1% year over year to $2.8 billion. Used-vehicle revenues rose 6.2% year over year to $1.4 billion. Revenues in the parts and service business gained 5.1% year over year to $901.5 million. Net revenues in the finance and insurance business amounted to $255 million, up 3% from the prior-year quarter’s level.

Revenues in the Domestic segment declined 6.5% year over year to $1.7 billion. The segment’s income edged down 1.8% to $66 million in the quarter under review. The segment comprises stores that sell vehicles manufactured by General Motors Company GM, Ford and FCA US.

Revenues in the Import segment fell 5.2% to $1.6 billion. Nevertheless, the segment’s income rose 4.2% to $81.4 million in the reported quarter. The segment consists of outlets that sell vehicles manufactured primarily by Toyota, Honda Motor Co., Ltd. HMC, Nissan and Hyundai.

The Premium Luxury segment comprises stores that retail vehicles manufactured by Mercedes-Benz, BMW, Lexus and Audi. Sales in the segment increased 5.2% to $1.8 billion. Segmental income increased 12.2% to $95.3 million in the reported quarter. (Read more: AutoNation’s Q2 Earnings and Revenues Beat Estimates)

Currently, AutoNation has a Zacks Rank #3.

5. Tesla reported loss per share of $1.12 in second-quarter 2019, wider than the Zacks Consensus Estimate of loss of 54 cents. The company recorded loss of $3.06 per share in the prior-year quarter.

During the reported quarter, net loss attributable to common shareholders amounted $408.3 million compared with the year-ago net loss of $717.5 million.

Revenues increased to $6.35 billion from $4 billion registered in second-quarter 2018. However, the figure missed the Zacks Consensus Estimate of $6.38 billion.

During the quarter under review, Tesla reported record delivery of 95,356 vehicles and production of 87,048 units. This surpassed the previous records achieved in fourth-quarter 2018.

Total automotive revenues, including that from automotive sales and leasing, increased 60% year over year to $5.38 billion in the reported quarter.

Energy generation and storage revenues decreased from $374.4 million in second-quarter 2018 to $368.2 million in the reported quarter. Services and other revenues increased significantly year over year to $605.1 million.

Tesla’s second-quarter 2019 automotive gross margin was 18.9%, decreasing 168 basis points (bps) from second-quarter 2018.

Energy generation and storage gross margin decreased 20 bps to 11.6% on a year-over-year basis.

Tesla had cash and cash equivalents of $4.95 billion as of Jun 30, 2019, compared with $2.24 billion, as of Jun 30, 2018.

Net cash provided by operating activities amounted to $863.6 million in second-quarter 2019 compared with $129.7 million of net cash used in second-quarter 2018. Capital expenditure declined to $249.7 million from $609.8 million in the year-ago quarter.

Currently, Tesla has a Zacks Rank #3.

Performance

In the past week, General Motors stock has gained the maximum. Among these stocks, only Harley-Davidson posted a decline in the share price.

In the past six months, Honda has declined the most while AutoZone, Inc. AZO recorded maximum gain.

Company

Last Week

Last 6 Months

GM

4.4%

5.8%

F

0.0%

16.6%

TSLA

3.9%

-10.8%

TM

2.8%

7.5%

HMC

1.9%

-12.2%

HOG

-0.5%

-3.2%

AAP

0.5%

3.5%

AZO

1.1%

44%


What’s Next in the Auto Space?

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

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Click to get this free report AutoNation, Inc. (AN) : Free Stock Analysis Report General Motors Company (GM) : Free Stock Analysis Report PACCAR Inc. (PCAR) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report AutoZone, Inc. (AZO) : Free Stock Analysis Report Autoliv, Inc. (ALV) : Free Stock Analysis Report Harley-Davidson, Inc. (HOG) : Free Stock Analysis Report To read this article on Zacks.com click here.