Auto Stocks Q4 Earnings: Key Forecast For PCAR, HOG & More

With fourth-quarter results getting released across all sectors, a few companies under the Auto sector have posted financial numbers. Two auto giants, Ford Motor Company (NYSE:F) and Fiat Chrysler Automobiles (NYSE:F) , have already announced quarterly performance on Jan 25. While Ford’s earnings missed the Zacks Consensus Estimate, Fiat Chrysler beat the same.

Now, let’s evaluate how the four auto companies namely PACCAR Inc. (NASDAQ:PCAR) , Harley-Davidson, Inc. (NYSE:HOG) , CNH Industrial N.V. (NYSE:CNHI) and Autoliv, Inc. (NYSE:ALV) are placed ahead of reporting quarterly figures on Jan 30.

Per the latest Earnings Outlook, 89 companies from the S&P 500 category have already announced fourth-quarter results as of Jan 24, registering earnings and revenue beat ratios of 80.9% and 74.2%, respectively.

However, the auto sector’s bottom line in the to-be-reported quarter is expected to record 12% growth while the top line is likely to witness a 5.1% year-over-year decline. However, the S&P 500 companies are estimated to log a respective 10.8% and 7.3% year-over-year rise in earnings and revenues during the quarter.

Automakers are closely observing a shift in their customer preferences. A change in the buying pattern of consumers has compelled automakers to reassess their strategies. Nowadays, the auto sector is focusing more on developing its line-up of pick-up trucks and crossovers.

Now, let’s take a look at the four auto companies scheduled to announce results on Jan 30.

We relied on the proven Zacks quantitative model, combining a favorable Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) with a positive Earnings ESP, to predict the chances of earnings beat this quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Per our proprietary methodology, Earnings ESP shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Our research shows that with an ideal combination of the two key ingredients — Zacks Rank and ESP — chances of a positive surprise are as high as 70% for the stocks lined up for an earnings release.

Headquartered in Bellevue, WA, PACCAR primarily engages in the designing and manufacturing of premium light, medium and heavy-duty trucks. Additionally, it develops and manufactures advanced diesel engines and distributes truck parts related to its primary business. Our model does not predict that the company is likely to beat on earnings this time around with an Earnings ESP of -1.34% and a Zacks Rank #3 as the combination leaves surprise prediction inconclusive.

Last quarter, the company surpassed the Zacks Consensus Estimate. Per its impressive earnings history, the company beat estimates thrice and missed on a single count in the trailing four quarters with an average positive surprise of 1.48%. PACCAR has a long-term earnings growth rate of 10%. (Read more: What's in Store for PACCAR This Earnings Season?).

PACCAR Inc. Price and EPS Surprise

Milwaukee, WI-based Harley-Davidson is a leading manufacturer and seller of custom, cruiser and touring motorcycles. It also offers related apparels, accessories and related service parts for riders. Last quarter, the company’s earnings matched the estimates. Also, it happened to deliver two positive earnings surprises, missed estimates once and posted in-line results on another occasion in the trailing four quarters with an average miss of 0.39%.

The company has a long-term growth rate of 8.5%. Per our model, it seems that Harley-Davidson is likely to beat on earnings this quarter. That is because it has an Earnings ESP of +0.84% and a Zacks Rank #3. (Read more: Is a Beat in Store for Harley-Davidson in Q4 Earnings?).

Harley-Davidson, Inc. Price and EPS Surprise

CNH Industrial engages in designing, producing and distributing vehicles ranging from tractors, trucks to buses. It also offers powertrain solutions for on and off-road plus marine vehicles. The company is a Zacks #3 Ranked player and its 0.00% Earnings ESP make surprise prediction difficult. However, CNH Industrial surpassed expectations with an average beat of 29.21% in all the trailing four quarters.

CNH Industrial N.V. Price and EPS Surprise

Based in Stockholm, Sweden, Autoliv is a worldwide leader in automotive safety. It engages in development, manufacturing and marketing of airbags, seatbelts and steering wheels. Last quarter, the company exceeded the earnings estimates. Per its mixed earnings track record, it outpaced as well as missed estimates twice, respectively, leading to an average beat of 2.46%.

Autoliv has a long-term growth rate of 8.2%. Our model does not conclusively show that the company is likely to beat on earnings this time around as it has an Earnings ESP of -1.34% and is also a #3 Ranked player, which leaves surprise prediction inconclusive.

Autoliv, Inc. Price and EPS Surprise

In view of the above findings, it appears that PACCAR, Autoliv and CNH Industrial are not expected to come up with an earnings beat in fourth-quarter 2017, while Harley-Davidson is likely to beat the estimate.

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