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ETFs in Focus Post Auto Earnings

Zacks Equity Research
Updated
Best Buy (BBY) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.

Global automobile sector behemoths, General Motors GM, Ford Motors F, Honda Motor Corporation HMC and Toyota Motors TM released their quarterly earnings.


General Motors


Shares of General Motors Company were up 2.9% at market close on Oct 25, 2017, as it surpassed the Zacks Consensus Estimate on both earnings and revenue.


Earnings Discussion


General Motors reported non-GAAP earnings per share (EPS) of $1.32 for the third quarter of 2017, beating the Zacks Consensus Estimate of $1.07 but decreasing 2.3% year over year. Moreover, revenues of $33.623 billion beat the consensus mark of $31.597 billion. The company reported a 21.5% year-over-year decline in third-quarter 2017 revenues.

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Revenue Performance


GM North America automotive revenues decreased to $24.819 billion from $31.085 billion in the year-ago quarter.


GM International Operations automotive revenues decreased to $3.007 billion from $3.376 billion in the year-ago quarter.


GM South America automotive revenues increased to $2.569 billion from $2.029 billion in the year-ago quarter.


Corporate automotive revenues increased to $80 million from $40 million in the year-ago quarter.


GM Financial Company revenues increased to $3.161 billion from $2.360 billion in the year-ago quarter.


Total unit sales decreased to 1.083 million units from 1.343 million in the year-ago quarter.


Ford


Shares of Ford Motors were up 1.9% at market close on Oct 26, 2017, as it surpassed the Zacks Consensus Estimate on both earnings and revenues.


Earnings Discussion


Ford reported non-GAAP earnings per share of $0.43, increasing 65.4% year over year. Also, it beat the Zacks Consensus Estimate of $0.33 for third-quarter 2017. Moreover, automotive revenues of $33.646 billion surpassed the consensus mark of $32.920 billion. The company reported a 0.94% increase in quarterly revenues year over year.


Revenue Performance


North America automotive revenues decreased to $20.9 billion from $21.8 billion in the year-ago quarter.


South America automotive revenues increased to $1.5 billion from $1.3 billion in the year-ago quarter.


Europe automotive revenues increased to $6.9 billion from $6.3 billion in the year-ago quarter.


Middle East & Africa automotive revenues decreased to $0.6 billion from $0.8 billion in the year-ago quarter.


Asia Pacific automotive revenues increased to $3.7 billion from $3.1 billion in the year-ago quarter.


Financial Services revenues increased to $2.8 billion from $2.6 billion in the year-ago quarter.


Honda Motor Corporation


Shares of Honda Motor were up 2.5% at market close on Nov 1, 2017, due to better-than-expected results. It beat the Zacks Consensus Estimate on both earnings and revenues.


Earnings Discussion


Honda reported non-GAAP earnings per share of $0.86, decreasing 11.3% year over year. Moreover, it beat the Zacks Consensus Estimate of $0.49 for the quarter. Consolidated sales revenues of $33.498 billion also beat the consensus mark of $31.432 billion. The company reported a 3.8% year-over-year increase in quarterly revenues.


Revenue Performance


Motorcycle Business revenues increased to $4.59 billion from $4.01 billion in the year-ago quarter.


Automobile Business revenues increased to $23.85 billion from $22.95 billion in the year-ago quarter.


Financial Service Business revenues increased to $4.82 billion from $4.34 billion in the year-ago quarter.


Power Product and Other Business revenues increased to $746.8 million from $673.5 million in the year-ago quarter.


Total Honda Group unit sales increased to 7.788 million units from 6.996 million units in the year-ago quarter.


Toyota Motor Corporation


Shares of Toyota Motor were up 1.45% at market close on Nov 7, 2017, due to better-than-expected results.


Earnings Discussion


Toyota reported earnings per share of $2.76, surpassing the Zacks Consensus Estimate of $2.62. Sales revenues of $64.407 billion also beat the consensus mark of $63.739 billion. The company reported a 1.7% year-over-year increase in quarterly revenues.


Revenue Performance


Automotive revenues decreased to $57.37 billion from $57.93 billion in the year-ago quarter.


Financial Service Business revenues increased to $4.44 billion from $4.23 billion in the year-ago quarter.


Other Business revenues increased to $3.88 billion from $2.78 billion in the year-ago quarter.


Total Toyota Group unit sales increased to 2.626 million units from 2.538 million units in the year-ago quarter.


In the current scenario, we believe it is prudent to discuss the following ETFs that have a relatively high exposure to the companies discussed.


First Trust NASDAQ Global Auto Index Fund CARZ


This fund focuses on providing exposure to the global automotive sector. It has AUM of $20.8 million and charges a fee of 70 basis points a year. It has an allocation of 8.4% to Honda, 8.4% to General Motors, 8.1% to Toyota and 7.8% to Ford (as of Nov 14, 2017). The fund has returned 24.9% in a year and 19.6% year to date (as of Nov 15, 2017).


WBI Power Factor High Dividend ETF WBIY


This fund focuses on providing exposure to the U.S. automotive sector. It has AUM of $38.4 million and charges a fee of 70 basis points a year. It has 5.5% allocation to General Motors and 5.1% to Ford (as of Sep 30, 2017). The fund has lost 1.7% year to date and 3.1% in a year (as of Nov 15, 2017).


BLDRS Asia 50 ADR Index Fund ADRA


This fund focuses on providing exposure to the Asian automotive sector. It has AUM of $23.6 million and charges a fee of 30 basis points a year. It has 10.2% allocation to Toyota and 3.5% to Honda (as of Nov 14, 2017). The fund has returned 22.9% year to date and 23.7% in the last one year (as of Nov 15, 2017).


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Ford Motor Company (F) : Free Stock Analysis Report
 
General Motors Company (GM) : Free Stock Analysis Report
 
Honda Motor Company, Ltd. (HMC) : Free Stock Analysis Report
 
Toyota Motor Corp Ltd Ord (TM) : Free Stock Analysis Report
 
BLDRS ASIA 50 (ADRA): ETF Research Reports
 
FT-NDQ GL AUTO (CARZ): ETF Research Reports
 
WBI-PWR FAC HD (WBIY): ETF Research Reports
 
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Zacks Investment Research
 
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