Markets
AXL

Fiat Chrysler (FCAU) Q4 Earnings: Is a Surprise in the Cards?

A generic image of a stock chart.
Credit: Shutterstock photo

Fiat Chrysler Automobiles N.V.FCAU is set to report fourth-quarter 2016 results, before the opening bell on Jan 26. Last quarter, the company posted a positive earnings surprise of 55.88%. Let's see how things are shaping up for this announcement.

Factors Influencing this Quarter

In 2016, Fiat Chrysler clocked higher sales in the U.S. as well as Europe which should drive fourth-quarter results. For 2016, the company's U.S. sales improved 18.4% year over year to 528,000 units. Additionally, in 2016, sales from Europe rose 14.1% to 993,000 units. The upside in sales is likely to have a positive impact on the company's revenues and earnings.

However, the company is undergoing a challenging phase owing to product recalls. Frequent product recalls increase the company's cost burden and adversely affect its results.

Earnings Whispers

Our proven model does not conclusively show that Fiat Chrysler is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:

Zacks ESP: The Earnings ESP for Fiat Chrysler is 0.00% because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 40 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Fiat Chrysler carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Fiat Chrysler Automobiles N.V. Price and EPS Surprise

Fiat Chrysler Automobiles N.V. Price and EPS Surprise | Fiat Chrysler Automobiles N.V. Quote

Price Performance

In the last three months, share price of Fiat Chrysler increased 57.9% while the Zacks categorized Auto-Manufacturers-Foreign industry saw a 4.2% increase. The company benefitted from strong sales recorded in the U.S and Europe.

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 +2.63% and a Zacks Rank #2. The company is slated 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 +3.85% 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 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?

Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>

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

Fiat Chrysler Automobiles N.V. (FCAU): Free Stock Analysis 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

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

AXL ALV WNC FCAU

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