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Auto Stock Roundup: TSLA & HOG Earnings Miss, PCAR & LEA Report a Beat

Zacks Equity Research
Investors need to pay close attention to Avaya (AVYA) stock based on the movements in the options market lately.

In the past week, auto companies such as Lear Corporation LEA, PACCAR Inc. PCAR, Harley-Davidson, Inc. HOG, Autoliv, Inc. ALV and Tesla, Inc. TSLA reported their quarterly numbers. While earnings of Lear and PACCAR surpassed the Zacks Consensus Estimate; Harley-Davidson, Autoliv and Tesla reported an earnings miss. In the revenue front, PACCAR and Tesla posted a positive surprise while the other three registered a miss.

Recap of the Week’s Most Important Stories

1.    In fourth-quarter 2018, Lear reported adjusted earnings per share of $4.05 compared with $4.38 recorded in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of $3.96. At the end of fourth-quarter 2018, adjusted net income was $261.3 million compared with $300.4 million recorded in the prior-year quarter.

During the reported quarter, revenues decreased 8% year over year to $4.94 billion. The Zacks Consensus Estimate was $4.98 billion. The slump was due to 5% fall in global vehicle production, including 15% decline in China, owing to tough economic conditions.

Moreover, the company’s core operating earnings slumped $8 million year over year to $389 million in the reported quarter. In fourth-quarter 2017, the figure was $441 million.

In 2018, Lear reported adjusted net income of $1.21 billion or $18.22 per share, up from $1.18 billion or $17 per share in the previous year.

Revenues for the year went up 3% year over year to $21.1 billion.

In the reported quarter, net sales at the Seating segment were $3.7 billion compared with $4.1 billion in fourth-quarter 2017. The adjusted margin was 8% compared with 8.1% in the prior-year quarter.

Net sales at the E-Systems segment was $1.2 billion compared with $1.3 billion generated in the year-ago quarter. Additionally, adjusted margin was 11.3% compared with 14.3% in fourth-quarter 2017. (Read more: Lear Surpasses Earnings Estimates in Q4)

Lear currently carries a Zacks Rank #3 (Hold).

2.    PACCAR’s fourth-quarter 2018 earnings were $1.65 per share, surpassing the Zacks Consensus Estimate of $1.57. Results were aided by quality products and services, record heavy-duty truck market share in Europe, strong global truck markets, and solid aftermarket parts’ results. Earnings in the prior-year quarter were $1.67 per share. Excluding one-time tax benefits, earnings in fourth-quarter 2017 were $1.18 per share.

PACCAR posted quarterly consolidated net sales and revenues of $5.93 billion, up from the prior-year quarter figure of $5.12 billion. The Zacks Consensus Estimate for revenues was pegged at $5.8 billion.

Net sales and revenues for 2018 were at a record $23.50 billion, up 21% from the 2017 figure.

Revenues from the Truck, Parts and Other segment increased to $5.93 billion in fourth-quarter 2018 from $5.12 billion in fourth-quarter 2017. The segment’s pre-tax income increased to $645.3 million from $522.9 million recorded a year ago.

Revenues from the Financial Services segment rose to $347 million from $332.2 million a year ago. Pre-tax income increased to $87.2 million from $71.9 million in the year-ago quarter. (Read more: PACCAR Q4 Earnings Surpass Estimates, Revenues Rise)

PACCAR currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

3.    Harley-Davidson’s adjusted earnings per share broke even in fourth-quarter 2018, missing the Zacks Consensus Estimate of 17 cents. In the prior-year quarter, the figure was 54 cents.

The company’s net income was $0.5 million compared with $8.3 million registered a year ago.

Revenues from the Motorcycle and Related Products segment declined 8.7% year over year to $955.6 million in the reported quarter, missing the Zacks Consensus Estimate of $1.05 billion. The company reported consolidated revenues of $1.15 billion, marking a decline from the prior year’s $1.23 billion. This fall was majorly due to the declining motorcycle demand in the United States.

In 2018, Harley-Davidson reported net income of $531.5 million, up from $521.8 million in the previous year.

Consolidated revenues for the year went up to $5.72 billion from the year-ago figure of $5.65 billion.

In fourth-quarter 2018, operating loss from the Motorcycles and Related Products segment was $59.5 million against operating income of $35.5 million in the year-ago quarter. Further, operating margin was negative 6.2% compared with positive 3.4% recorded in the year-ago quarter. This fall in margin was due to restructuring charges, incremental tariffs and higher recall costs.

In the quarter ending on Dec 31, the company shipped 43,489 motorcycles compared with 47,198 in fourth-quarter 2017.

Harley-Davidson’s retail motorcycle sales in the United States declined 10.1% to 20,849 units. International sales declined 2.6% to 18,462 motorcycles from 18,947 in the prior-year quarter. During the reported quarter, sales in Latin America, and Canada region gained 2.7% and 2.4%, respectively. However, sales in the Asia Pacific, and the Middle East and Africa (EMEA) reduced 6.2% and 1.4%, respectively.

Harley-Davidson’s worldwide retail motorcycle sales declined 6.7% to 39,311 units from 42,142 in the year-ago quarter.

Revenues from the Parts & Accessories segment decreased 15% to $142.2 million. Moreover, the metric for General Merchandise — including MotorClothes apparel and accessories — lost 18% to $58.4 million. (Read more: Harley-Davison Q4 Earnings & Revenues Miss Estimates)

Harley-Davidson currently carries a Zacks Rank #3.

4.    Autoliv reported adjusted earnings of $1.42 per share in fourth-quarter 2018, missing the Zacks Consensus Estimate of $1.62. Moreover, the bottom line declined from the prior-year quarter figure of $2.29.

During the quarter under review, Autoliv reported net sales of $2.19 billion from continuing operations, reflecting 1.6% year-over-year rise. The Zacks Consensus Estimate for the same was pegged at $2.24 billion. Quarterly organic sales grew 4.2%, majorly driven by 19% organic sales increase in the Americas.

Operating income from continuing operations plunged 91.6% to $21 million. Adjusted operating margin from continuing operations was 10.9% in the reported quarter, lower than the prior-year quarter figure of 11.8%.

For 2018, net sales rose 6.7% to $8.68 billion, up 6.7% from 2017.

Adjusted earnings per share from continuing operations were $6.83, down from the 2017 figure of $7.12.

Autoliv had cash and cash equivalents of $615.8 million as of Dec 31, 2018, lower than $959.5 million reported as of Dec 31, 2017. Long-term debt was $1.61 billion as of Dec 31, 2018, witnessing an increase from $1.31 billion as of Dec 31, 2017.

At the end of fourth-quarter 2018, the company’s operating cash flow decreased to $289.4 million from the year-ago figure of $389.4 million. Net capital expenditure decreased to $133.4 million from the year-ago figure of $167.8 million. (Read more: Autoliv Q4 Earnings Miss Estimates, Revenues Up Y/Y)

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

5.    Tesla has reported earnings per share of $1.93 in fourth-quarter 2018, missing the Zacks Consensus Estimate of $2.08. The company reported loss of $3.04 per share in the prior-year quarter.

During the reported quarter, net income attributable to common shareholders amounted to $344.8 million against the year-ago net loss of $513.1 million.

Revenues increased to $7.2 billion from $3.3 billion registered in fourth-quarter 2017. The figure surpassed the Zacks Consensus Estimate of $7.1 billion.

During the quarter under review, Tesla delivered 27,607 Model S and Model X vehicles, and 63,359 Model 3 vehicles to customers.

Total automotive revenues, including revenues from automotive sales and leasing, increased appreciably year over year to $6.3 billion in the reported quarter. The rise was due to a robust increase in Model 3 deliveries.

Energy generation and storage revenues increased from $298 million in fourth-quarter 2017 to $371.5 million in the reported quarter. The rise was mainly due to considerable growth of energy-storage deployments.

Services and other revenues increased 84.4% year over year to $531.2 million.

Tesla’s fourth-quarter 2018 automotive gross margin was 24.3%, increasing 540 basis points (bps) from fourth-quarter 2017.

Energy generation and storage gross margin increased 604 bps on a year-over-year basis to 11.5%.

For 2018, Tesla registered loss per share of $1.33, narrower than loss of $8.66 per share in 2017.

Revenues for 2018 were $18.5 billion, up from $9.6 billion in 2017.

Tesla currently carries a Zacks Rank #3.

Performance

In the last week, all the stocks gained except for Advance Auto Parts, Inc. AAP. Tesla gained the maximum.

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

Company Last Week Last 6 Months
GM 3.8% 5.3%
F 4.4% -12%
TSLA 7.4% 2.6%
TM 0.5% -6.5%
HMC 2.5% -1.9%
HOG 1.2% -14.5%
AAP -3.2% 13.8%
AZO 1% 20.2%


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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AutoZone, Inc. (AZO) : Free Stock Analysis Report
 
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