The eagerly awaited earnings of Tesla Motors, Inc. (TSLA) came out after the market closed Wednesday, and overshadowed all other developments in the auto industry over the last week. The company incurred losses and weaker-than-expected revenues, which resulted in a 3.9% fall in the stock price in after-hours trading.
Penske Automotive Group, Inc. (PAG) and Tata Motors Ltd. (TTM) also reported their financial results during the week. Among other key developments, General Motors Co. (GM) reported weak China sales for January, while Ford Motor Co. (F) offered details of a $2.6 billion investment in a Spanish plant.
(Read last to last week’s recap here: Auto Stock Roundup for Feb 5, 2015)
Recap of the Most Important Earnings
1. Tesla posted adjusted loss (including stock-based compensation expense) of 48 cents per share in the fourth quarter of 2014 against adjusted profit of 13 cents per share in the year-ago quarter. The Zacks Consensus Estimate too was pegged at a profit of 15 cents. Excluding the impact of the deferment of Model S revenues due to lease accounting, the top line jumped 43.9% to $1.1 billion from $761.3 million a year ago, but missed the Zacks Consensus Estimate of $1.25 billion.
Delivery shortfalls due to production delays and one-time manufacturing inefficiencies due to the launch of P85D and Autopilot functionality, along with a stronger dollar, were blamed for the underperformance. However, Tesla anticipates delivering around 55,000 vehicles globally in 2015, up 70% over 2014. Production volume for the first quarter is expected at around 10,000 cars, while deliveries are projected lower at 9,500 units due to higher vehicles in transit to Europe and Asia.
2. Penske’s fourth-quarter 2014 adjusted earnings improved 14.5% to 79 cents from 69 cents reported in the year-ago quarter. The result marginally missed the Zacks Consensus Estimate of 80 cents. Revenues grew 16.3% year over year to $4.41 billion, beating the Zacks Consensus Estimate of $4.37 billion. The improvement was driven by a 10.5% increase in total retail sales to 98,251 units, including a 6.8% rise in same-store retail sales to 94,357 units.
3. Tata Motors’ earnings declined to INR11.11 per ordinary share (90 cents per American Depositary Share or ADS) for the third quarter of fiscal 2015 (ended Dec 31, 2014) from INR14.91 per share ($1.21 per ADS) in the year-ago quarter. Consolidated revenues increased 9.6% year over year to INR699.73 billion ($11.3 billion). This improvement was attributable to an increase in wholesale volumes, a better product mix and a favorable market mix of Jaguar Land Rover. This was partially offset by the negative impact of a softer economy on the standalone business.
4. General Motors and its joint ventures in China reported a 2.4% year-over-year decrease in sales in the nation to 339,781 vehicles in Jan 2015. The company blamed the decline on inventory shortage at dealerships due to the record high sales by Shanghai GM in Dec 2014.
5. Ford reported that it is in the final stages of upgrading its manufacturing plant in Valencia, Spain, which involves an investment of $2.6 billion, the highest by any automaker in that country’s auto industry. The investment will increase the plant’s production capacity to 450,000 vehicles a year. This year, Ford will increase the plant’s production by 40% to 400,000 units. The improvement will place the Valencia plant among Ford’s biggest and most flexible units in the world.
Performance
Most auto stocks performed well in the last week, with General Motors gaining the most. Meanwhile, Tesla recorded the maximum loss due to weak investor sentiments before its earnings release. The electric carmaker was the biggest loser in the last 6 months, with an 18.1% plunge in stock price. Meanwhile, Advance Auto Parts Inc. (AAP) sticks to its position as the top gainer in the last six months.
|
Company |
Last 1-Week Period |
Last 6 Months |
|
GM |
+5.1% |
+11.8% |
|
F |
+2.4% |
-5.6% |
|
TSLA |
-2.6% |
-18.1% |
|
TM |
-1.3% |
+11.8% |
|
HMC |
+3.8% |
-4.2% |
|
HOG |
0.0% |
+1.7% |
|
AAP |
+3.8% |
+30.2% |
|
AZO |
+3.1% |
+18.3% |
What’s Next in the Auto Space?
It will be interesting to see whether Advance Auto Parts still wears its winning laurel after it reports fourth-quarter and full-year 2014 financial results today. Additionally, automakers will report their January sales figures for China and Europe in the days to come.
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