ETFs In Focus Post Automobile Earnings

Global automobile sector behemoths, General Motors (NYSE:GM) , Ford Motors (NYSE:F) , Honda Motor Corporation (NYSE:HMC) and Toyota Motors (NYSE:TM) released their quarterly earnings.

General Motors

Shares of General Motors Company were down 0.70% at market close on July 25, 2017, due to the revenue miss. However, it beat the Zacks Consensus Estimate on earnings.

Earnings Discussion

General Motors reported non-GAAP earnings per share (EPS) of $1.89 for the second quarter of 2017, up 1.6% year over year and ahead of the Zacks Consensus Estimate of $1.72. However, revenues of $36.984 billion failed to beat the consensus mark of $40.247 billion. The company reported a 12.7% year-over -year decrease in second-quarter 2017 revenues.

Revenue Performance

GM North America automotive revenues decreased to $28.437 billion from $30.222 billion in the year-ago quarter.

GM International Operations automotive revenues decreased to $3.215 billion from $3.342 billion in the year-ago quarter.

GM South America automotive revenues increased to $2.297 billion from $1.639 billion in the year-ago quarter.

Corporate automotive revenues increased to $52 million from $43 million in the year-ago quarter.

GM Financial Company revenues increased to $2.990 billion from $2.138 billion in the year-ago quarter.

Total unit sales decreased to 2.343 million units from 2.390 million in the year-ago quarter.

Ford

Shares of Ford Motors were down 1.9% at market close on July 25, 2017, due to the revenue miss. However, it beat the Zacks Consensus Estimate on earnings.

Earnings Discussion

Ford reported non-GAAP earnings per share of $0.56, increasing 7.7% year over year. Moreover, it beat the Zacks Consensus Estimate of $0.44 for second-quarter 2017. However, automotive revenues of $37.113 billion failed to beat the consensus mark of $37.945 billion. The company reported a 0.5% increase in quarterly revenues year over year.

Revenue Performance

North America automotive revenues increased to $24.5 billion from $23.8 billion in the year-ago quarter.

South America automotive revenues increased to $1.5 billion from $1.3 billion in the year-ago quarter.

Europe automotive revenues decreased to $7.1 billion from $8.1 billion in the year-ago quarter.

Middle East & Africa automotive revenues decreased to $0.6 billion from $1 billion in the year-ago quarter.

Asia Pacific automotive revenues decreased to $3.4 billion from $4 billion in the year-ago quarter.

Financial Services revenues increased to $2.738 billion from $2.553 billion in the year-ago quarter.

Honda Motor Corporation

Shares of Honda Motor were up 2.2% at market close on August 1, 2017, due to better-than-expected results. It beat the Zacks Consensus Estimate on both earnings and revenue.

Earnings Discussion

Honda reported non-GAAP earnings per share of $1.04, up 10.63 year over year. Moreover, it beat the Zacks Consensus Estimate of $0.83 for the quarter. Consolidated sales revenue of $33.429 billion also beat the consensus mark of $31.297 billion. The company reported a 0.9% decrease in quarterly revenues year over year.

Revenue Performance

Motorcycle Business revenues increased to $4.58 billion from $4 billion in the year-ago quarter.

Automobile Business revenues increased to $23.33 billion from $23.13 billion in the year-ago quarter.

Financial Service Business revenues increased to $4.83 billion from $4.3 billion in the year-ago quarter.

Power Product and Other Business revenues remained flat at $0.70 billion.

Total Honda Group unit sales increased to 7.297 million units from 7.053 million units in the year-ago quarter.

Toyota Motor Corporation

Shares of Toyota Motor were up 2.2% at market close on August 1, 2017, due to better-than-expected results.

Earnings Discussion

Toyota reported net income of $5.52 billion compared with $5.11 billion a year ago. Sales revenue of $63.491 billion also beat the consensus mark of $60.891 billion. The company reported a 4.05% increase in quarterly revenues year over year.

Revenue Performance

Automotive revenues increased to $57.37 billion from $55.82 billion in the year-ago quarter.

Financial Service Business revenues increased to $4.53 billion from $4.06 billion in the year-ago quarter.

Other Business revenues increased to $3.04 billion from $2.3 billion in the year-ago quarter.

Total Toyota Group unit sales increased to 2.215 million units from 2.172 million units in the year-ago quarter.

In the current scenario, we believe it is prudent to discuss the following ETFs that have a relatively high exposure to the companies discussed.

First Trust NASDAQ Global Auto Index Fund CARZ

This fund focuses on providing exposure to the global automotive sector. It has AUM of $16.81 million and charges a fee of 70 basis points a year. It has an 8.18% allocation to Toyota, 7.95% to Honda, 7.93% to General Motors and 7.61% to Ford (as of August 2, 2017). The fund has returned 12.47% in the last one year and 8.19% year to date (as of August 3, 2017) (read: 3 ETFs & Stocks to Buy Post June Retail Sales).

WBI Power Factor High Dividend ETF WBIY

This fund focuses on providing exposure to the U.S. automotive sector. It has AUM of $36.5 million and charges a fee of 67 basis points a year. It has 4.87% allocation to General Motors and 4.79% to Ford (as of August 4, 2017). The fund has lost 2.96% year to date and 4.32% in the last one year (as of August 3, 2017).

BLDRS Asia 50 ADR Index Fund ADRA

This fund focuses on providing exposure to the Asian automotive sector. It has AUM of $22.8 million and charges a fee of 30 basis points a year. It has 10% allocation to Toyota and 3.19% allocation to Honda (as of August 2, 2017). The fund has returned 18.63% year to date and 19.07% in the last one year (as of August 3, 2017).

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