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Auto Stock Roundup: GM, F & HOG Post Q2 Loss, ORLY Delivers Earnings Beat

A host of auto companies reported quarterly numbers in the past week. Top U.S. carmakers, General Motors and Ford posted net loss as the pandemic-induced lower demand and sales weighed on the companies during the quarter. Nonetheless, both the firms incurred narrower-than-expected loss. The American motorcycle maker Harley Davidson also posted quarterly loss for the first time in more than a decade. Nonetheless, O’Reilly managed to impress investors with stellar quarterly numbers despite coronavirus woes. Importantly, most of the companies still refrained from providing their 2020 guidance amid coronavirus-led uncertainty. They intend to provide updates when a clear picture emerges on the economic front.

(Read the Last Auto Stock Roundup here).

Recap of the Week’s Most Important Stories

Harley Davidson HOG reported second-quarter 2020 loss of 60 cents per share against the Zacks Consensus Estimate of earnings of 6 cents, as coronavirus shutdowns sapped motorcycle sales. In the year-ago quarter, the company recorded earnings of $1.23 per share. Total revenues from Motorcycle and Related products, which constitute bulk of the firm’s overall revenues, declined 53.3% year over year to $669 million for the reported quarter. The top line also missed the Zacks Consensus Estimate of $798 million. It reported consolidated revenues (including motorcycle sales and financial services revenues) of $865 million, down 47% year over year.To pull out the company from the sales slump, Harley Davidson’s CEO Jochen Zeitz laid out a turnaround plan, dubbed as ‘Rewire’, and is working on a five-year (2021-2025) strategic plan ‘Hardwire’ that is expected to be shared in fourth-quarter 2020. (Harley-Davidson Slips to Q2 Loss, Looks for Turnaround).

General Motors GM reported an adjusted loss of 50 cents per share for second-quarter 2020, narrower than the Zacks Consensus Estimate of loss of $1.72. In the year-ago quarter, the company had recorded earnings of $1.64 per share. The top U.S. carmaker reported revenues of $16,778 million, which missed the Zacks Consensus Estimate of $20,475 million. Revenues also decreased from the year-ago figure of $36,060 million. General Motors had cash and cash equivalents of $28.2 billion as of Jun 30, 2020 compared with $19.1 billion on Dec 31, 2019. Long-term automotive debt stands at $32.2 billion compared with $12.5 billion as of Dec 31, 2019. The company recorded negative adjusted automotive free cash flow (FCF) of $9 billion for second-quarter 2020 against a positive FCF of $2.5 billion in the prior-year period. (General Motors Posts Narrower-Than-Expected Loss in Q2)

Ford F reported second-quarter 2020 adjusted loss per share of 35 cents, narrower than the Zacks Consensus Estimate of a loss of $1.25. In the prior-year quarter, adjusted earnings came in at 32 cents per share. Ford registered revenues of $19,371 million for the June-end quarter, down from the year-ago quarter’s $38,853 million. For the reported quarter, the company generated automotive revenues of $16,622 million. The figure surpassed the Zacks Consensus Estimate of $14,976 million. In the prior-year quarter, the figure amounted to $35,758 million.The firm expects third-quarter adjusted EBIT in the range of $0.5-$1.5 billion. Ford also intends to launch the revamped version of F-150, Mustang Mach-E and Ford Bronco this year, which were delayed due to the pandemic. (Ford Q2 Loss Narrower Than Expected, Revenues Top Estimates)

Cummins Inc. CMI reported second-quarter 2020 earnings of $1.95 per share, which surpassed the Zacks Consensus Estimate of $0.85.The bottom line, however, declined from second-quarter 2019 earnings of $4.27 a share amid coronavirus woes. Cummins’ revenues also declined 38% year over year to $3,852 million. However, revenues beat the Zacks Consensus Estimate of $3,569 million.Its cash and cash equivalents were $1,751 million as of Jun 28, 2020, up from $1,129 million on Dec 31, 2019. Long-term debt totaled $1,639 million, up from $1,576 million on Dec 31, 2019. While the firm expects third-quarter sales to improve sequentially, coronavirus-led uncertainty still looms large. On account of this, Cummins refrained from providing any forecast for full-year 2020. (Cummins Q2 Earnings & Sales Top Estimates, Decline Y/Y)

O’Reilly Automotive Inc.’s ORLY shares gained more than 7% in after-hours trading, after the firm posted stellar second-quarter 2020 results. It not only smashed earnings and revenue estimates, but also recorded year-over-year growth of the said metrics despite coronavirus woes. The auto parts retailer reported second-quarter 2020 earnings per share of $7.10, which surpassed the Zacks Consensus Estimate of $4.10. Remarkable comparable store sales growth led to the outperformance. Precisely, comps grew 16.2% against the Zacks Consensus Estimate of a decline of 12%. Free cash flow jumped to $985.7 million from $259.7 million a year ago. New stores opened during the quarter totaled 50, bringing the total store count to 5,583 as of Jun 30, 2020. (O'Reilly Q2 Earnings Beat on Strong Comps Growth)

Price Performance

The following table shows the price movement of some of the major auto players over the past week and six-month period.

In the past week, all stocks have declined apart from Advance Auto Parts and AutoZone. In the past six months, all stocks have slid apart from Tesla, Advance Auto Parts and AutoZone.

What’s Next in the Auto Space?

Watch out for further impact of the pandemic on the auto sector. Investors are keenly awaiting the upcoming results of important auto firms including BorgWarner, Lear Corporation, Carvana and Nikola that are set to report this week.

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Ford Motor Company (F): Free Stock Analysis Report

Cummins Inc. (CMI): Free Stock Analysis Report

OReilly Automotive, Inc. (ORLY): Free Stock Analysis Report

General Motors Company (GM): Free Stock Analysis Report

HarleyDavidson, Inc. (HOG): Free Stock Analysis Report

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