The Zacks Automotive – Domestic industry has reported upbeat second-quarter 2023 earnings, with 86% of the six companies that have reported till now (as of Jul 31) surpassing the Zacks Consensus Estimate. It belongs to the top 24% of the Zacks Industry Rank.
The strong results came on the back ofincreasing sales and easing supply-chain hurdles. According to Reuters, easing supply-chain disruptions are set to help the automakers increase their production levels and meet pent up consumer demand levels, resulting in a surge in new U.S. light vehicle sales. S&P, as stated in the article, expects the sale levels to witness a year-over-year increase of 18% in July, reaching levels of 1.33 million units.
In the second quarter of 2023, U.S. auto sales experienced a more significant increase than initially anticipated. General Motors and Ford witnessed double-digit growth in new vehicle sales, from the previous year, as well as and the previous quarter. However, the electric vehicle (EV) market encounters obstacles, including price reductions and increasing inventory levels, which present a temporary interruption in the market’s growth trajectory (Read: ETFs in Focus on Surging EV Sales ).
Meanwhile, the automobile market’s healthy recovery and a rise in second-quarter new vehicle sales, buoyed by robust consumer demand and improving supply, have put automobile ETFs in the spotlight. Investors can look into ETFs like – First Trust Nasdaq Transportation ETF FTXR, First Trust S-Network Future Vehicles & Technology ETF CARZ, Global X Autonomous & Electric Vehicles ETF DRIV, KraneShares Electric Vehicles and Future Mobility Index ETF KARS and iShares Self-Driving EV and Tech ETF IDRV.
Below, we highlight Q2 earnings results of a few renowned automobile companies. Results have been robust so far.
Earnings in Focus
General Motors
On Jul 25, General Motors GM reported second-quarter 2023 adjusted earnings of $1.91 per share, which beat the Zacks Consensus Estimate of $1.73. The upbeat earnings reported by GM are largely attributed to the North American market’s results surpassing expectations. Additionally, the bottom line also rose from the year-ago quarter’s earnings of $1.14 per share.
On the revenue front, the Detroit automaker reported revenues of $44,746 million, surpassing the Zacks Consensus Estimate of $42,478 million and increasing from $35,759 million recorded in the year-ago period.
General Motors currently has a Zacks Rank #2 (Buy) and has a VGM Score of A (as of Jul 31). The U.S. auto giant has revised its projection for 2023 adjusted EBIT upward, to $12-$14 billion from $11-$13 billion.
Ford Motor
On Jul 27, Ford Motor F reported upbeat second-quarter 2023 earnings of 72 cents per share for second-quarter 2023, which beat the Zacks Consensus Estimate of 51 cents. Robust pricing and demand for the company’s traditional vehicles helped fuel the strong performance.
The company’s consolidated second-quarter revenues came in at $44,954 million, rising 11.8% year over year.
Ford reports automotive results under three business segments — Ford Model e, Ford Blue and Ford Pro. Ford Model e, which focuses on EVs, witnessed an increase of 44% year-over-year in total wholesale volume with revenues from the segment rising 39% year over year to $1.8 billion.
Ford currently has a Zacks Rank #1 (Strong Buy) along with a VGM Score of A (as of Jul 31). The company also lifted its projection for 2023 adjusted EBIT to the range of $11-$12 billion from $9-$11 billion guided earlier.
ETFs in Focus
First Trust Nasdaq Transportation ETF (FTXR) – Up about 2.07% in the past one week (as of Jul 31)
First Trust S-Network Future Vehicles & Technology ETF (CARZ) – Up about 2.36% in the past one week (as of Jul 31)
Global X Autonomous & Electric Vehicles ETF (DRIV) – Up about 3.59% in the past one week (as of Jul 31)
KraneShares Electric Vehicles and Future Mobility Index ETF (KARS) – Up about 3.38% in the past one week (as of Jul 31)
iShares Self-Driving EV and Tech ETF (IDRV) – Up about 4.83% in the past one week (as of Jul 31)
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Ford Motor Company (F) : Free Stock Analysis Report
Global X Autonomous & Electric Vehicles ETF (DRIV): ETF Research Reports
General Motors Company (GM) : Free Stock Analysis Report
First Trust S-Network Future Vehicles & Technology ETF (CARZ): ETF Research Reports
First Trust NASDAQ Transportation ETF (FTXR): ETF Research Reports
KraneShares Electric Vehicles and Future Mobility Index ETF (KARS): ETF Research Reports
iShares Self-Driving EV and Tech ETF (IDRV): ETF Research Reports
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