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The Zacks Analyst Blog Highlights: Ford, BorgWarner, Cummins, O'Reilly Automotive and LKQ Corp

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Zacks Equity Research
·5 min read
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For Immediate Release

Chicago, IL – November 3, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Ford Motor Company F, BorgWarner Inc. BWA, Cummins Inc. CMI, O'Reilly Automotive, Inc. ORLY and LKQ Corporation LKQ.

Here are highlights from Monday’s Analyst Blog:

Auto Stock Roundup: Q3 Earnings Results and More

In the past week, many auto companies (including five S&P 500 auto stocks) came out with quarterly numbers and delivered better-than-anticipated results amid gradual recovery of vehicle demand and related parts. All the five S&P 500 auto stocks — namely FordBorgWarnerCumminsO’Reilly Automotive and LKQ Corp — that released results last week managed to surpass earnings estimates.

Earnings Snapshots of Key Auto Players

Ford reported third-quarter 2020 adjusted earnings of 65 cents per share, which comfortably outpaced the Zacks Consensus Estimate of 22 cents. The bottom line also surged 91.2% from the year-ago profit of 34 cents per share. For the reported quarter, the company generated automotive revenues of $34,707 million. The figure outpaced the Zacks Consensus Estimate of $32,700 million and was higher than the prior-year quarter’s $33,931 million.

Ford anticipates fourth-quarter adjusted EBIT between break-even and a $500-million loss, indicating a decline from both the third quarter and the year-ago period. (Ford's Q3 Earnings & Sales Surpass Estimates, Up Y/Y)

BorgWarner reported adjusted earnings of 88 cents per share for third-quarter 2020, which beat the Zacks Consensus Estimate of 75 cents. However, the bottom line declined 8.3% from the year-ago profit of 96 cents per share. This automotive equipment supplier reported net sales of $2,534 million, which outpaced the Zacks Consensus Estimate of $2,378 million.

Moreover, the top-line figure was 2% higher than the year-ago quarter’s $2,492 million. For the ongoing quarter, net sales are expected in the range of $3.46-$3.61 billion. Also, adjusted operating margin is projected at 8.8-9.6%. (BorgWarner's Q3 Earnings Top Estimates, Guidance Up)

Cummins reported third-quarter 2020 earnings of $3.57 per share, which surpassed the Zacks Consensus Estimate of $2.41.The bottom line, however, declined from third-quarter 2019 earnings of $3.83 a share amid coronavirus woes. Cummins’ revenues also declined 11.3% year over year to $5,118 million. However, revenues beat the Zacks Consensus Estimate of $4,473.1 million.

Cummins’ cash and cash equivalents were $2,967 million as of Sep 27, 2020, up from $1,129 million on Dec 31, 2019. Long-term debt totaled $3,609 million, up from $1,576 million on Dec 31, 2019. The firm expects fourth-quarter 2020 revenues to be on par with the third-quarter level. (Cummins' Q3 Earnings & Sales Top Estimates, Down Y/Y)

O’Reilly reported third-quarter 2020 earnings per share of $7.07, which surpassed the Zacks Consensus Estimate of $6.34. Remarkable comparable store sales growth drove this outperformance. Comps grew 16.9% year on year, outpacing the Zacks Consensus Estimate of 9%. The bottom line also increased 39.1% year over year. This U.S.-based specialty retailer of automotive parts registered quarterly revenues of $3,207.6 million, which topped the consensus mark of $2,978 million.

Moreover, the top line was higher than the prior-year level of $2,666.5 million. Free cash flow jumped 51.2% year over year to $662.8 million from the prior year’s $438.5 million. (O'Reilly's Q3 Earnings Beat on Stellar Comps Growth)

LKQ Corp. reported adjusted earnings of 75 cents per share for third-quarter 2020, which surpassed the Zacks Consensus Estimate of 52 cents. Moreover, the bottom line was higher than the year-ago profit of 61 cents per share. This aftermarket auto parts distributor registered quarterly revenues of $3,047.7 million, which topped the Zacks Consensus Estimate of $2,941 million. However, the top-line figure decreased 3.2% from the year-ago level of $3,147.7 million. For the third quarter, the company generated free cash flow of $188.9 million, down 28% year over year. LKQ Corp. has decided to recommence the share-repurchase program in fourth-quarter 2020. (LKQ Corp's Q3 Earnings Surpass Estimates, Increase Y/Y)

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Ford Motor Company (F) : Free Stock Analysis Report
 
BorgWarner Inc. (BWA) : Free Stock Analysis Report
 
Cummins Inc. (CMI) : Free Stock Analysis Report
 
OReilly Automotive, Inc. (ORLY) : Free Stock Analysis Report
 
LKQ Corporation (LKQ) : Free Stock Analysis Report
 
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