The second-quarter earnings season for the Auto-Tires-Trucks sector kicked off on Friday, with Autoliv exceeding top and bottom line estimates. This week, three S&P 500 sector components— Tesla, General Motors and Genuine Parts— will report quarterly numbers.
Per the Earnings Trend report dated July 15, the auto sector’s earnings and revenues for second-quarter 2026 are expected to grow 6.2% and 0.8%, respectively, on a year-over-year basis. We have identified — with the help of the Zacks Stock Screener — a few auto players that are set to outshine the Zacks Consensus Estimate this earnings season.
These include General Motors GM, Tesla TSLA,Cummins CMI and BorgWarner BWA. Before we discuss the companies, let’s take a look at the factors shaping the quarterly performance.
Factors at Play
The U.S. auto market held up better than many expected in the second quarter of 2026. Despite geopolitical tensions, elevated fuel prices, and an uncertain policy environment, demand for new vehicles remained resilient, with buyers continuing to make purchases. Uncertainty is no longer stopping them from buying vehicles. Many have adapted to years of inflation, high interest rates, and policy changes, choosing to adjust their budget or vehicle preference instead of delaying purchases.
Per Cox Automotive, second-quarter sales crossed 4.1 million, representing a double-digit percentage growth relative to the first quarter of 2026. June vehicle sales were solid, with the seasonally adjusted average rate (SAAR) at 16.5 million, the highest level in 2026. That said, second-quarter sales were still down on a yearly basis amid affordability pressures.
New vehicle prices continued to edge higher, with the average listing price reaching $49,336 in June, up 1.4% year over year. Meanwhile, higher fuel costs are driving buyers toward fuel-efficient models, prompting automakers to broaden their hybrid lineups.
Picking Potential Winners
While it is not possible to be sure about which companies are well-positioned to beat earnings estimates, our proprietary methodology — Earnings ESP — makes it relatively simple. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Our research shows that for stocks with the abovementioned combination, the chances of an earnings beat are as high as 70%.
Our Choices
General Motors: While General Motors held its title of best-selling automaker in the United States, its second-quarter deliveries in the country declined 4% year over year. We expect GM North America (GMNA) revenues to be $37.8 billion, suggesting a year-over-year decline of 4.3%. But supported by pricing discipline, cost control and low incentives, our estimate for the GMNA segment’s operating income is $3.03 billion, which suggests a rise of 35.7% year over year.
In China, General Motors’ sales remained strong with 357,000 units, thanks to new launches, resilient demand and favorable product mix. Buick Electra E7 emerged as a top seller, while the Wuling Bin Guo and Baojun Huajing S gained traction following new launches. Premium MPVs and SUVs also performed well, with the GL8, Envision and Cadillac XT5 posting solid sales. Meanwhile, the Wuling Hong Guang MINIEV and Bin Guo remained GM's best-selling models in China.
GM has an Earnings ESP of +5.17% and a Zacks Rank #3. The company is scheduled to release second-quarter results tomorrow. The Zacks Consensus Estimate for General Motors’ to-be-reported quarter’s earnings and revenues is pegged at $3.13 per share and $46.5 billion, respectively. EPS estimates for the second quarter have moved up by 2 cents in the past seven days. General Motors surpassed earnings estimates in each of the trailing four quarters.
General Motors Company Price and EPS Surprise
General Motors Company price-eps-surprise | General Motors Company Quote
Tesla: In the second quarter, Tesla delivered 480,126 vehicles (including 467,762 Model 3/Y and 12,364 other models), beating our model estimate of 400,133 units. Deliveries increased 34% sequentially and 25% on a year-over-year basis. It was Tesla’s strongest quarter for EV sales since the third quarter of 2025. We expect the company’s automotive revenues and gross margins to improve year over year on the back of strong deliveries.
The company’s energy business revenues are also expected to increase as Tesla deployed 13.5 GWh of energy storage in the second quarter, reflecting an uptick of 53% and 40% on a sequential and year-over-year basis, respectively. The number also came ahead of our model projection of 12.66 GWh.The outperformance was driven by stronger-than-expected demand for Megapack and Powerwall.
Tesla has an Earnings ESP of +5.31% and a Zacks Rank #3. The company is scheduled to release second-quarter results on Wednesday. The Zacks Consensus Estimate for Tesla’s to-be-reported quarter’s earnings and revenues is pegged at 50 cents per share and $29 billion, respectively. EPS estimates for the second quarter have moved up by 3 cents in the past seven days. Tesla surpassed earnings estimates in three of the trailing four quarters and missed once.
Tesla, Inc. Price and EPS Surprise
Tesla, Inc. price-eps-surprise | Tesla, Inc. Quote
Cummins: The company is increasingly benefiting from its Power Systems segment. Demand for backup power generators and data center power infrastructure is growing, providing Cummins with a stronger and less cyclical revenue stream. The Zacks Consensus Estimate for Power Systems segment sales for the to-be-reported quarter is pegged at $2.18 billion, implying an uptick both on a sequential and a yearly basis.
The Distribution segment is riding the same wave. The Zacks Consensus Estimate for segment sales for the to-be-reported quarter is pegged at $3.35 billion, implying an uptick both on a sequential and a yearly basis. Since the Distribution unit also carries a meaningful mix of parts and service revenues, this growth adds a layer of earnings resilience that isn't tied to new equipment cycles alone. Encouragingly, loss from the Accelera unit is also expected to reduce significantly compared to the first quarter of 2026 and the second quarter of 2025.
Cummins has an Earnings ESP of +0.78% and a Zacks Rank #3. The company is scheduled to release second-quarter results on Aug. 4. The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $7.33 per share and $9.3 billion, respectively. EPS estimates for the second quarter have moved up by 6 cents in the past 60 days. Cummins surpassed earnings estimates in each of the trailing four quarters.
Cummins Inc. Price and EPS Surprise
Cummins Inc. price-eps-surprise | Cummins Inc. Quote
BorgWarner: The company is benefiting from strong new business wins across hybrid, ICE, and EV platforms, expanding exposure to Chinese OEM exports, and improving operational efficiency that continues to support margin growth. The company is also leveraging its automotive expertise to expand into high-growth data center power infrastructure through turbine generators, battery energy storage systems and microgrid inverters. Aggressive cost controls, operational discipline and the exit from weaker charging business are helping the company’s overall margins.
BWA also continues winning new hybrid and drivetrain business with Chinese automakers. The company’s localized manufacturing footprint and long-standing OEM relationships in Asia provide an advantage as Chinese brands scale internationally. The Zacks Consensus Estimate for BorgWarner’s revenues from PowerDrive and Drivetrain & Morse segments is pegged at $596 million and $1.43 billion, respectively, indicating an upside on both a sequential and yearly basis.
BorgWarner has an Earnings ESP of +0.62% and a Zacks Rank #3. The company is scheduled to release second-quarter results on Aug. 5. The Zacks Consensus Estimate for BorgWarner’s to-be-reported quarter’s earnings and revenues is pegged at $1.26 per share and $3.6 billion, respectively. EPS estimates for the second quarter have moved up by a cent in the past 30 days. BorgWarner surpassed earnings estimates in each of the trailing four quarters.
BorgWarner Inc. Price and EPS Surprise
BorgWarner Inc. price-eps-surprise | BorgWarner Inc. Quote
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
