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Auto Stock Roundup: Tesla Incurs Wider Loss, Toyota Misses on Earnings & Revenues

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A few major earnings releases and defective airbags were the biggest newsmakers in the auto sector over the last week. Tesla Motors, Inc. TSLA reported significantly wider-than-expected adjusted loss and a miss on revenues for the quarter ended Dec 31, 2015. Also, Toyota Motor Corp. TM missed both earnings and revenue estimates.

Honda Motor Co., Ltd. HMC , Daimler, Volkswagen and BMW announced additional recalls related to defective Takata airbag inflators. Further, a defect was reported by Continental Automotive Systems in its airbag control units, which could lead to the recall of nearly 5 million vehicles globally.

Meanwhile, Ford Motor Co. F reported strong China sales data for January.

(Read the previous roundup here: Auto Stock Roundup for Feb 4, 2016 )

Recap of the Week's Most Important Stories

1. Tesla incurred adjusted loss (excluding one-time items other than stock-based compensation expense) of $1.29 per share in the fourth quarter of 2015, much wider than adjusted loss of 48 cents in the year-ago quarter. Moreover, the loss was significantly wider than the Zacks Consensus Estimate of a loss of 34 cents per share.

Adjusted revenues improved 59% to $1.75 billion but missed the Zacks Consensus Estimate of $1.80 billion. Tesla delivered 17,478 cars including 206 Model X vehicles in the reported quarter, in line with the expectation of 17,000-19,000 vehicle deliveries.

The automaker is targeting 80,000-90,000 vehicle deliveries in 2016, including 16,000 in the first quarter. It also hopes to achieve positive net cash flow and non-GAAP profitability for the full year.

2. Toyota recorded earnings of ¥199.54 per share ($3.30 per ADR) in third-quarter fiscal 2016 (ended Dec 31, 2015) compared with ¥189.77 per share ($3.33 per ADR) earned in third-quarter fiscal 2015 (ended Dec 31, 2014). Earnings per ADR missed the Zacks Consensus Estimate of $3.44. Consolidated revenues increased 2.4% year over year to ¥7.34 trillion ($60.66 billion) in the third quarter of fiscal 2016. However, the figure fell short of the Zacks Consensus Estimate of $63.54 billion.

Toyota reaffirmed its consolidated revenue guidance of ¥27.5 trillion ($229.17 billion) for fiscal 2016 that reflects a 1% improvement over fiscal 2015. Net earnings are expected at around ¥2.27 trillion ($18.92 billion) or ¥723.60 per share ($12.06 per ADR). The net income guidance reflects 4.4% improvement over fiscal 2015 (read more: Toyota Misses Q3 Earnings and Revenue Estimates ).

3. Honda announced the recall of another 5.7 million vehicles related to the defective Takata airbag inflators. These include 440,000 vehicles in Japan and 2.2 million in the U.S. Apart from Honda, Daimler AG, Volkswagen AG and BMW AG also recalled around 2.3 million vehicles in the U.S. last week, related to these airbag inflators.

The defective Takata airbags can explode, shooting metal fragments and injuring passengers, in case of a car crash. There have been at least 11 fatalities and 139 injuries globally due to these faulty airbags.

4. Continental Automotive Systems reported that the airbag control units supplied by it for five million vehicles made by six auto manufacturers, including Honda, Fiat Chrysler and Mercedes-Benz, maybe be defective. These include around 1.5-2 million vehicles in the U.S. Per Continental Automotive, the possible failure, due to corrosion, of electronic systems built from 2006 to 2010 may stop the airbags from deploying in case of a crash or may cause them to accidentally deploy when not needed.

5. Ford's China sales surged 36% to a record 130,832 vehicles in Jan 2016. The company's passenger car joint venture, Changan Ford Automobile, recorded a 58% year-over-year increase in vehicle sales to a record 111,856 units in the month. However, Ford's commercial vehicle investment in China, Jiangling Motors Corporation, sold 17,255 vehicles in Jan 2016, down 24% over Jan 2015.

Performance

All auto stocks listed below recorded losses over the last week as well as in six months due to company specific factors and the overall market weakness. Tesla recorded the maximum loss in both periods with a 17.2% and 39.5% loss, respectively, over the short and long term.

Company Last 1-Week Period Last 6 Months
GM -4.2% -10.1%
F -1.0% -22.9%
TSLA -17.2% -39.5%
TM -7.1% -17.2%
HMC -4.9% -27.5%
HOG -2.2% -34.7%
AAP -6.3% -19.4%
AZO -7.3% -2.4%

What's Next in the Auto Space?

Advance Auto Parts Inc. AAP and Penske Automotive Group, Inc. PAG are expected to report their earnings for the quarter ended Dec 31, 2015, before the market opens today.

A few automakers may also report their China and Europe sales data for January.

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PENSKE AUTO GRP (PAG): Free Stock Analysis Report

FORD MOTOR CO (F): Free Stock Analysis Report

TESLA MOTORS (TSLA): Free Stock Analysis Report

HONDA MOTOR (HMC): Free Stock Analysis Report

TOYOTA MOTOR CP (TM): Free Stock Analysis Report

ADVANCE AUTO PT (AAP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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