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Auto Stocks to Watch for Earnings on Feb 9: BWA, CMI, DAN

The auto sector's performance has been below par so far in the Q4 earnings season. As of Feb 3, nearly 40% of the sector's companies had reported results. These companies recorded 33.8% year-over-year fall in earnings and 3.9% decline in revenues, per our latest Earnings Preview . In comparison, the 275 S&P 500 companies that had reported through Feb 3 posted a 6.9% growth in earnings and a 4.2% rise in revenues.

The weak performance is expected to continue till the end of this earnings season. By the end of Q4, auto sector earnings are projected to decline 25.2%, while revenues are expected to inch up 0.2%. Meanwhile, total S&P 500 earnings and revenues are expected to increase 6.8% and 3.9% year over year, respectively.

Safety recalls and related costs have turned out to be a major issue for most automakers in recent years. Recall-related repair costs have increased their financial burden. The pressure to maintain attractive incentives and deals to boost volumes is also straining their margins and bottom line. Further, the adverse impact of foreign currency translation remains a headwind for many companies.

Meanwhile, strong sales growth in the key markets of U.S., China and Europe has been the primary driving factor for the auto sector in Q4. Also, low fuel prices boosted the sales of higher margin vehicle segments, such as SUVs and light trucks. With these factors in mind, let's see what awaits these three auto stocks that are slated to release their results on Feb 9.

BorgWarner Inc.BWA has an Earnings ESP of 0.00% because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 84 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

The company managed to beat earnings in each of the trailing four quarters, thus delivering a positive average surprise of 2.3% over this period. BorgWarner carries a Zacks Rank #4 (Sell) (read more: BorgWarner Q4 Earnings: A Disappointment in Store? ).

BorgWarner Inc. Price and EPS Surprise

BorgWarner Inc. Price and EPS Surprise | BorgWarner Inc. Quote

Cummins Inc.CMI has an Earnings ESP of +0.99% because the Most Accurate estimate of $2.04 stands above the Zacks Consensus Estimate of $2.02. It posted positive earnings surprises in three of the last four quarters, with a positive average surprise of 5.13%. Cummins currently carries a Zacks Rank #3 (Hold) (read more: Cummins Likely to Beat on Q4 Earnings: Stock to Gain? )

Cummins Inc. Price and EPS Surprise

Cummins Inc. Price and EPS Surprise | Cummins Inc. Quote

Dana IncorporatedDAN currently has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 39 cents. Dana Incorporated posted positive earnings surprises in two of the trailing four quarters with an average beat of 0.06%. The company carries a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Dana Incorporated Price and EPS Surprise

Dana Incorporated Price and EPS Surprise | Dana Incorporated Quote

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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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