Zacks Analyst Blog Highlights General Motors, Ford, PACCAR, LKQ and O’Reilly Automotive

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For immediate release

Chicago, IL – May 3, 2022 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: General Motors GM, Ford F, PACCAR, Inc. PCAR, LKQ Corp LKQ and O’Reilly Automotive ORLY.

Here are the highlights from Monday’s analyst blog:

Automated Actions Roundup: Q1 Earnings Release

Last week, five S&P 500 automakers released their first-quarter 2022 earnings releases. General Motors beat first-quarter earnings estimates, Ford missed the same. Both U.S. auto giants saw year-on-year declines in sales and profits.

Meanwhile, the trucking giant PACCAR, Inc. not only delivered a full pace, but also recorded year-over-year sales and profit growth. The distributor of automotive spare parts LKQ Corp. also put on an impressive show in the first quarter, with earnings and revenue beating expectations and growing year-over-year. Auto parts retailer O’Reilly Automotive also impressed investors with strong results.

Each of these five companies currently carries a Zacks rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the headlines

General Motors reported first-quarter 2022 adjusted earnings of $2.09 per share, beating Zacks’ consensus estimate of $1.56. Better than expected contributions from the North America, International and Financial segments drove the outperformance. Net income, however, compares unfavorably to prior year quarter earnings of $2.25 per share. Revenue of $35,979 million missed Zacks’ consensus estimate of $36,252.5 million. Revenue compares favorably to the prior year’s figure of $32,474 million.

General Motors had cash and cash equivalents of $16,349 million as of March 31, 2022. Long-term automotive debt at the end of the quarter was $16,155 million. The company reported adjusted automotive free cash flow of $6 million in the first quarter of 2022. For 2022, the company expects net income for the full year to be in a range of 9 .6 to $11.2 billion, higher than the previous range of $9.4 to $10.8 billion. . The adjusted EBIT forecast remains unchanged in the range of $13.0 billion to $15.0 billion. The Adjusted EPS estimate has been increased from the previous range of $6.25-$7.25 to $6.5-$7.5.

Ford reported adjusted earnings of 38 cents per share in the first quarter of 2022, missing Zacks’ consensus estimate of 39 cents. Lower-than-expected earnings in North America and a larger-than-expected pre-tax loss in China led to this underperformance. Net income compares unfavorably to prior year quarter earnings of 89 cents. The company’s consolidated revenue in the first quarter was $34.5 billion, down 4.9% year-over-year.

Ford reported negative adjusted FCF of $580 million in the quarter. It had cash and cash equivalents of $10,579 million as of March 31, 2022 and long-term auto debt was $17,158 million. Ford expects 2022 adjusted EBIT between $11.5 billion and $12.5 billion, implying a 15-25% upside from 2021 levels. wholesale of vehicles in 2022 are expected to jump 10% to 15%. Adjusted FCF is projected in the $5.5-6.5 billion range for 2022, suggesting a jump from the $4.6 billion recorded in 2021.

PACCAR reported earnings of $1.72 per share in the first quarter of 2022, beating Zacks’ consensus estimate of $1.51 and up from the $1.35 figure a year ago. Higher than expected revenues across all segments led to outperformance. Consolidated revenues (including trucks and financial services) amounted to $6,472.6 million, up from $5,845.5 million recorded in the corresponding quarter of 2021. Sales of trucks, parts et al. came in at $6,106.4 million, surpassing the consensus mark of $5,781 million.

PACCAR’s cash and marketable debt securities were $4,672.4 million as of March 31, 2022, compared to $4,813 million as of December 31, 2021. Capital and R&D expenditures for 2022 are contemplated in the range of $425-475 million and $350-400 million, respectively. The company declared a cash dividend of 34 cents in the quarter under review.

LKQ reported adjusted earnings of $1 per share in the first quarter of 2022, beating Zacks’ consensus estimate of 91 cents and rising 6.4% year-over-year from 94 cents. This outperformance is explained by higher than expected revenues from the North American and European segments. LKQ posted quarterly revenue of $3,348 million, beating Zacks’ consensus estimate of $3,279.7 million. Additionally, revenue increased 5.6% from the prior year level of $3,170.8 million. Organic parts and service revenue also increased 6.9% year-over-year.

LKQ had cash and cash equivalents of $327 million as of March 31, 2022. Long-term debt (excluding current portion) was $2,680 million as of March 31, 2022. For 2022, the company expects adjusted EPS of around $3.80. -$4.10, up from the previous view of $3.72 to $4.02 per share. The company’s free cash flow estimate remains the same, at a low of $1 billion. Cash flow from operations is expected to be $1.3 billion. It forecasts organic revenue growth for parts and services in the range of 4.5% to 6.5%, versus 3 to 5% previously estimated.

O’Reilly reported adjusted earnings per share of $7.17 in the first quarter of 2022, excluding the Zacks consensus estimate of $7.43. Net income, however, increased from $7.06 per share recorded in the prior year quarter. This auto parts retailer posted quarterly revenue of $3,296 million, beating the consensus mark of $3,283.3 million. Revenue was also 6.6% higher than the prior year’s figure of $3,090.9 million. Earnings rose 4.8% year-over-year, beating Zacks’ consensus estimate of 4.17%.

O’Reilly had cash and cash equivalents of $191.5 million as of March 31, 2022, down from $611 million in the prior year quarter. Its long-term debt was $3,828 million, higher than the level of $3,824.3 million a year ago. For 2022, ORLY forecasts total revenues of between $14.2 billion and $14.5 billion. Earnings per share are estimated in the range of $32.35 to $32.85. The company expects comparable store sales growth of 5-7%. Free cash flow remains in the range of $1.3 to $1.6 billion and capital expenditures between $650 and $750 million.

Price performance

The following chart shows the price movement of some of the major automotive players over the past week and six-month period.

What’s new in the Auto Area?

Stay tuned for quarterly results from a slew of automakers expected to release this week. Also, watch for any updates on how automakers will tackle the semiconductor shortage — made worse by the Russian-Ukrainian war and rising COVID-19 infections — and make changes in the commercial operations.

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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. To visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.

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Ford Motor Company (F): Free Inventory Analysis Report

PACCAR Inc. (PCAR): Free Inventory Analysis Report

O’Reilly Automotive, Inc. (ORLY): Free Inventory Analysis Report

General Motors Company (GM): Free Inventory Analysis Report

LKQ Corporation (LKQ): Free Stock Analysis Report

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