Auto Stock Roundup: GM Q2 Earnings Beat, Tesla Opens Gigafactory, Toyota Loses 1H Sales Lead

While the Q2 earnings season is in full swing, most major automakers are yet to report. General Motors Co. (NYSE:GM) is the only biggie from the auto sector to have reported so far. The company surpassed both earnings and revenue estimates and raised its guidance for the year. Meanwhile, Tesla Motors, Inc. (NASDAQ:TSLA) held the official opening of its partly constructed Gigafactory and Lear Corp. (NYSE:LEA) signed a license agreement with Qualcomm (NASDAQ:QCOM).

Further, Toyota Motor Corporation (NYSE:TM) posted a decline in global sales in the first half of the year, thus losing its lead to Volkswagen (DE:VOWG_p). Meanwhile, Penske Automotive Group, Inc. (NYSE:PAG) raised its quarterly dividend.

(Read the previous roundup here: Auto Stock Roundup for Jul 21, 2016)

Recap of the Week’s Most Important Stories

1. General Motors recorded adjusted earnings of $1.86 per share in the second quarter of 2016 that beat the Zacks Consensus Estimate of $1.52 by a wide margin. Earnings also surged 44% from $1.29 per share recorded in the second quarter of 2015. Revenues in the reported quarter were $42.4 billion, 11% higher than $38.2 billion recorded in the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate of $39.09 billion.

Based on the strong financial performance in the first half of 2016, General Motors expects full-year earnings per share in the range of $5.50–$6.00, up from the previous forecast of $5.25–$5.75 and higher than $5.02 recorded in 2015 (read more: General Motors' Q2 Earnings Beat Estimates, View Up).

2. Tesla held the official opening of the Gigafactory in Nevada. The construction of the factory, which started two years ago, is only 14% complete. Tesla expects 31% of the factory to complete by the second quarter of 2017. After completion, the factory will occupy around 10 million square feet.

Tesla projects that about one-third of the Gigafactory’s batteries will be used for the Powerwall business initially. Later, this will increase to about half of the production volume. By 2018, Tesla expects the cost of its batteries to reduce by over one-third due to large-scale production at the Gigafactory. In the same year, Tesla expects the annual lithium-ion battery production of the Gigafactory to reach around 35 gigawatt hours, which is equal to total global production in 2014. Moreover, it has the capacity to increase production to around 150 gigawatt hours (read more: Tesla Officially Opens Partly-Constructed Gigafactory).

3. Toyota sold 4.99 million vehicles globally in the first half of 2016. This indicates a 0.6% decline from the first half of 2015. Moreover, Toyota lost the sales lead to Volkswagen, which posted a 1.5% increase to 5.12 million units in the same timeframe. Toyota’s sales in Japan increased 2.7% to 198,486 vehicles, but sales outside Japan fell 0.7% to 3.87 million units.

4. Lear Corp. has signed a Wireless Electric Vehicle Charging (WEVC) license agreement with Qualcomm. Per the agreement, Lear Corp. will use the Qualcomm Halo WEVC technology to develop and supply WEVC systems to plug-in hybrid and electric vehicle manufacturers, as well as wireless charging infrastructure companies.

5. Penske Automotive increased its quarterly dividend by a penny to 28 cents per share. The increased dividend will be paid on Sep 1, 2016, to shareholders of record as of Aug 10, 2016.

Performance

Auto sector companies had mostly good fortunes on the stock market last week. Harley-Davidson gained the most ahead of its second-quarter earnings release. AutoZone (NYSE:AZO) was the only stock to lose value among the ones listed below.

Over the last six months also Harley-Davidson outperformed the others with a 34.9% gain. Toyota lost the most over the longer term.

Auto-Tires-Trucks Sector Price Index

Auto-Tires-Trucks Sector Price Index

What’s Next in the Auto Space?

Ford Motor Co. (NYSE:F) , Harley-Davidson, Penske Automotive and Lear Corp. will report second-quarter financial results before the market opens today. Many other auto sector companies, including Honda Motor Co., Ltd. (NYSE:HMC) , Tesla and Toyota, will report earnings over the coming week.

Automakers will also report their U.S. sales figures for July on Aug 2.