A few companies in the Auto sector have already released their earnings for the second quarter while a majority of them will report in the next few days. On Jul 23, PACCAR Inc. PCAR and Harley-Davidson Inc. HOG reported their quarterly numbers. While Harley-Davidson beat earnings estimates, PACCAR missed the same.
Per the latest Earnings Preview, the auto sector’s earnings and revenues for the quarter under review are expected to decline 6% and 1%, respectively, on a year-over-year basis.
Automakers recently reported U.S. sales for June. The overall auto sales performance was mixed for the month as well as for the quarter ending Jun 30. Like the past few months, June witnessed fairly strong demand for SUVs and pickup trucks while the same for passenger cars declined.
U.S. auto sales are witnessing a slowdown and overall domestic new-vehicle sales are expected to decline this year. This is likely to have an adverse impact on second-quarter results due to rising interest rates and competition from off-lease vehicles.
Now, let’s assess a couple of important automakers, namely, BorgWarner Inc. BWA, LKQ Corporation LKQ, which are slated to announce their second-quarter numbers on Jul 25.
The Zacks methodology helps to find stocks with better prospect by combining a favorable Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) with a positive Earnings ESP.
Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Research shows that for stocks, with the combination of a favorable Zacks Rank and Earnings ESP, chances of a positive surprise are as high as 70%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Michigan-based BorgWarner is one of the leading manufacturers of powertrain products for major automakers. Its products cater to light, medium and heavy-duty vehicles. In the last reported quarter, the company surpassed the Zacks Consensus Estimate. Additionally, it delivered a positive earnings surprise in all the trailing four quarters. Further, it has a long-term earnings growth rate of 7.8%.
Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of -0.58% and a Zacks Rank of 4 (Sell). (Read more: What's in Store for BorgWarner This Earnings Season?)
You can see the complete list of today’s Zacks #1 Rank stocks here.
BorgWarner Inc. Price and EPS Surprise
BorgWarner Inc. price-eps-surprise | BorgWarner Inc. Quote
Chicago, IL-based LKQ Corporation supplies alternative and specialty parts for the repairing and accessorizing of vehicles. In the last reported quarter, the company pulled off an earnings beat. In the last four quarters, it surpassed estimates twice, missed once and met on one occasion, the average beat being 1.2%.
It has a long-term growth rate of 13%. Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of -2.80% and a Zacks Rank of 4. (Read more: LKQ Corp to Report Q2 Earnings: What's in the Offing?)
LKQ Corporation Price and EPS Surprise
LKQ Corporation price-eps-surprise | LKQ Corporation Quote
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PACCAR Inc. (PCAR) : Free Stock Analysis Report
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LKQ Corporation (LKQ) : Free Stock Analysis Report
Harley-Davidson, Inc. (HOG) : Free Stock Analysis Report
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