5 Auto Stocks To Beat Earnings Estimates On A Rough Track

An earnings announcement is an important event and has a large impact on an investors’ opinion about the current and future value of a particular company. A positive earnings report can lead to price appreciation, which produces higher returns for its investors.

That said, earnings releases for different sectors, including the Auto segment, are now pouring in. Per the latest Earnings Outlook, as of Jan 31, 185 companies from the S&P 500 index have already announced results for the quarter ending Dec 31, 2017, registering earnings and revenue beat ratios of 82.2% and 80%, respectively. Earnings and revenues beat ratios for the companies coming from the Auto sector are 66.7% and 100%, respectively.

The auto sector’s bottom line in the to-be-reported quarter is expected to register 10.3% growth, while the top line is likely to witness a 2.5% year-over-year decline. However, the S&P 500 companies are estimated to register 11.9% and 7.6% year-over-year rise in earnings and revenues, respectively, during the quarter.

Now, let’s take a look at the auto companies slated to report results in the next few weeks. After a record 2016, auto sales in the United States declined in 2017. This is the first time since the financial crisis that auto sales have declined from the previous-year figure.

According to Autodata, in 2017, auto sales in the United States were 17.2 million, down from 17.85 million in the prior year. Despite the decline, 2017 overall was a robust year for the auto industry. Auto sales are likely to decline further in 2018 despite a strong economy. Rising interest rates and return of a huge number of late-model used cars are coming in the way of new vehicle sales.

Auto Sales: On A Rough Track

Auto companies have come up with January 2018 sales figures. In January, Ford Motor Company (F) and Fiat Chrysler Automobiles N.V. reported year-over-year sales decline, whereas General Motors Company (GM) and Toyota Motor Corporation reported an increase in sales.

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