Auto Stock Roundup: MGA, AAP, WPRT, MTOR Beat On Earnings, SUP Misses, GM In Focus

Last week saw quite a few auto companies reporting their quarterly numbers. While Magna International Inc. (NYSE:MGA) , Advance Auto Parts Inc. (NYSE:AAP) , Westport Fuel Systems Inc. (NASDAQ:WPRT) and Meritor, Inc. (NYSE:MTOR) delivered an earnings beat, Superior Industries International Inc. (NYSE:SUP) came up with lower-than-expected earnings numbers.

Per a Reuters report, General Motors Co. (NYSE:GM) this week announced that it will launch less a new range of electric vehicles (EVs) by 2021. This is a clear indication of the auto giant making an attempt to take on Tesla, Inc. (NASDAQ:TSLA) which is facing problems with the mass production of its comparatively affordable Model 3.

On a different note, this year, prices of used vehicles have not declined as much as expected. Although this is not good news for the customers, it has brought cheer among the automakers and dealers. In fact, low prices of used vehicles compel automakers to offer higher discounts to customers on new vehicles. However, as a result of lower-than-anticipated price decline of used cars, sale of new cars will not be affected much as was anticipated.

(Read the previous roundup here: Auto Stock Roundup for Nov 9, 2017)

Recap of the Week’s Most Important Stories

1. Magna International reported third-quarter 2017 earnings per share of $1.36, surpassing the Zacks Consensus Estimate by a couple of cents. The bottom line also improved 5.4% from $1.29 registered in the prior-year quarter.

Revenues increased 7.4% year over year to $9.5 billion. The top line also surpassed the Zacks Consensus Estimate of $9.05 billion. The quarter witnessed a 55% increase in complete vehicle assembly sales, accounting for the launch of BMW 5-Series, which was assembled at its facility in Graz, Austria. However, the company reported a decrease of 3% in adjusted EBIT to $692 million from the year-ago figure of $715 million (read more: Magna Q3 Earnings & Revenues Beat Estimates, Up Y/Y).

Currently, Magna has a Zacks Rank #3 (Hold).

2. Superior Industries reported adjusted loss of 2 cents per share in third-quarter 2017. The Zacks Consensus Estimate for earnings was 36 cents.

Third-quarter 2017 net income, including after-tax expense, came in at $5.1 million, or 20 cents per share.

Revenues were $331.4 million in the reported quarter, higher than $175.6 million in the year-ago quarter. Revenues also surpassed the Zacks Consensus Estimate of $316 million.

Wheel unit shipments were 5 million compared with 2.9 million units in the prior-year quarter. Value-added sales, i.e., net sales minus pass-through charges for aluminum, increased to $187.4 million compared with $98.8 million in the third quarter of 2016.

Gross profit increased to $23.9 million (7.2% of net sales) from $11 million (6.3%) in the year-ago quarter. The increase was due to the addition of the European operations.

Selling, general and administrative expenses jumped to $18.1 million in third-quarter 2017 from $5.7 million in the prior-year quarter (read more: Superior Industries Q3 Earnings Miss, Revenues Grow).

Currently, Superior Industries has a Zacks Rank #5 (Strong Sell).

3. Advance Auto Parts reported adjusted earnings of $1.43 per share in the third quarter of fiscal 2017 (ended Oct 7), declining 17.3% from $1.73 in the prior-year quarter. The figure, however, surpassed the Zacks Consensus Estimate of $1.22. Adjusted operating income declined to $172.2 million from $217.6 million in the third quarter of fiscal 2016.

Advance Auto Parts reported revenues of $2.18 billion, missing the Zacks Consensus Estimate of $2.21 billion. Revenues were 3% lower than the year-ago quarter figure. During the quarter, comparable store sales (comps) were down 3.4% year over year.

Gross profit declined to $947.7 million in the reported quarter from $988.2 million a year ago. Gross margin declined 51 basis points year over year to 43.4%.

Adjusted selling, general and administrative (SG&A) expenses totaled $775.5 million or 35.5% of sales compared with $770.6 million or 34.3% in the year-ago period (read more: Advance Auto Parts Q3 Earnings Top Estimates, Down Y/Y).

Currently, Superior Industries has a Zacks Rank #3.

4. Westport Fuel Systems’ third-quarter 2017 adjusted net loss from continuing operations came in at 12 cents per share, narrower than both the Zacks Consensus Estimate of a loss of 15 cents and adjusted net loss of 14 cents in third-quarter 2016.

Also, total net loss from operating activities in the quarter narrowed to $15.7 million from net loss of $33.6 million in third-quarter 2016.

Westport Fuel Systems logged consolidated revenues of $60.8 million in the reported quarter, up 8% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $50.6 million. This upside was driven by strong sales in the aftermarket business and an increase in the value of Euro compared with the U.S. dollar (read more: Westport Fuel Q3 Earnings & Revenues Beat Estimates).

Currently, Westport Fuel Systems has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

5. Meritor, Inc. registered a 82.3% year-over-year increase in adjusted earnings of 62 cents per share in the fourth quarter of 2017 (ended Sep 30, 2017), comfortably surpassing the Zacks Consensus Estimate of 47 cents.

Adjusted income from continuing operations was $56 million compared with $30 million in the fourth quarter of 2016.

Revenues increased 26.7% year over year to $922 million. The top line also surpassed the Zacks Consensus Estimate of $837 million.

Meritor’s adjusted EBITDA (earnings before interest, tax, depreciation and amortization) increased to $98 million from $74 million in the year-ago quarter. Adjusted EBITDA margin was 10.6% compared with 10.2% in the year-ago quarter. Adjusted EBITDA and EBITDA margin increased on a year-over-year basis, driven by high revenue growth.

Currently, Meritor has a Zacks Rank #1.

Performance

Last week, the steepest increase was registered by Advance Auto Parts and the sharpest decline was witnessed by Honda Motor Co.

In the last six months, the steepest increase and the sharpest decline were witnessed by General Motors and Advance Auto Parts, respectively.

What’s Next in the Auto Space?

Earnings for the quarter ending Sep 30, 2017 is nearing its end. Watch out for the usual news releases of other auto companies over the next week.

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