Markets

Delphi Automotive (DLPH) Earnings: A Beat in Store in Q4?

Delphi Automotive PLCDLPH is set to report fourth-quarter and full-year 2016 results on Feb 2. In the last quarter, the company posted a positive earnings surprise of 5.63%. Let's see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Delphi Automotive is likely to beat earnings this season because it has the right combination of the two key components.

Zacks ESP:Earnings ESP , which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at +1.88%. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Delphi Automotive PLC Price and EPS Surprise

Delphi Automotive PLC Price and EPS Surprise | Delphi Automotive PLC Quote

Zacks Rank: Delphi Automotive currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Ranks #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings. Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions..

Delphi Automotive's Zacks Rank #3 and positive ESP make us reasonably confident of a positive earnings beat.

What is Driving the Better-than-Expected Earnings?

Delphi Automotive is one of the largest vehicle parts manufacturers in the world. The company's innovative products have helped it to secure all the 25 leading global automobile manufacturers as customers.

Delphi Automotive regularly undertakes acquisitions and alliances to enhance technological capability, increase operating scale, augment client base and expand geographically. The HellermannTyton Group acquisition has been boosting the company's earnings. The transaction is expected to boost Delphi Automotive's earnings by 15 cents per share, excluding one-time integration expenses, from 2016.

For 2016, Delphi Automotive expects revenues, adjusted earnings per share, adjusted operating income and operating cash flow to increase over 2015. This raises hopes for good results in the fourth quarter.

Price Performance

Delphi Automotive has significantly underperformed the Zacks categorized Automotive-Original Equipment industry over the last 3 months, due to falling vehicle production in South America and loss of revenues from divested businesses. Production cuts in South America by some automakers are adversely affecting Delphi Automotive's sales in the region. The company's shares have gained 9.1% over the last 3 months, compared with a 17.2% rise recorded by the industry.

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Wabash National Corporation WNC has an Earnings ESP of +5.13% and a Zacks Rank #1. The company is expected to report fourth-quarter and full-year 2016 results on Jan 31. You can see the complete list of today's Zacks #1 Rank stocks here.

Autoliv Inc. ALV has an Earnings ESP of +1.63% and a Zacks Rank #3. The company's fourth-quarter and full-year 2016 financial results are scheduled for release on Feb 2.

American Axle & Manufacturing Holdings, Inc. AXL has an Earnings ESP of +2.94% and a Zacks Rank #3. The company is expected to report fourth-quarter and full-year 2016 financial numbers on Feb 10.

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today's most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

American Axle & Manufacturing Holdings, Inc. (AXL): Free Stock Analysis Report

Autoliv, Inc. (ALV): Free Stock Analysis Report

Wabash National Corporation (WNC): Free Stock Analysis Report

Delphi Automotive PLC (DLPH): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

DLPH ALV WNC AXL

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More