The Zacks Automotive – Domestic industry has reported earnings for the fourth quarter of 2023, with 60% of the 5 companies reporting so far (as of February 7) beating the Zacks Consensus Estimate. This ranks in the top 46% of the Zacks Industry Rank.
The Fed’s dovish stance and the prospect of a rate cut in 2024 will ensure increased economic activity, which is likely to provide a boost to the industry. Moderate inflation levels also strengthen the industry. The industry’s growing momentum is evidenced by the recent performance of the Dow Jones Transportation Average, which tracks the largest U.S. transportation companies. The stock has gained 3.61% since the beginning of the month, outpacing the S&P 500’s gain of 3.08% in the same period.
Below we highlight the fourth quarter financial results of some well-known domestic car companies. So far, although there has been a lag compared to the same period last year, business performance has been strong and there is optimism for next year.
focus on bottom line
general motors
General Motors GM on January 31 reported fourth-quarter 2023 adjusted earnings per share of $1.24, which beat the Zacks Consensus Estimate of $1.12. However, the bottom line fell 41.5% from the year-ago level of $2.12. Revenue of $42.98 billion exceeded the Zacks Consensus Estimate of $40.78 billion but was down from $43.1 billion in the year-ago period.
GM North America (“GMNA”) net revenue was $35.23 billion, down from $35.47 billion in the same period in 2022. However, this number exceeded the model forecast of $33.2 billion due to better-than-expected deliveries. GM International (“GMI”)’s net revenue for the reported quarter was $3.94 billion, down from $4.32 billion in the year-ago period. The metric also fell short of our estimate of his $4.32 billion, as shipments were lower than expected.
However, in contrast to the fourth-quarter results, the Detroit automaker’s optimistic outlook for 2024 and intent to increase shareholder value sent the company’s stock up 9% in early market. GM raised its full-year 2024 adjusted EPS forecast to $8.50 to $9.50.
GM is poised to build on the lessons and achievements of 2023 and enter a strong 2024, according to a letter to shareholders from GM CEO Mary Barra. Additionally, a resilient U.S. economy will provide tailwinds, along with a growing job market and improving auto sales. car manufacturer. The company’s optimism is supported by the 33.76% increase in GM’s stock price since late November 2023.
ford motor
On February 6, Ford F reported fourth-quarter 2023 adjusted earnings of $0.29 per share, beating the Zacks Consensus Estimate of $0.12 but down from $0.51 in the year-ago period. The company’s consolidated revenue for the quarter was $43.3 billion, exceeding the Zacks Consensus Estimate of $37.96 billion and increasing 4% from the year-ago period.
The traditional American automaker reports its automotive results across three business segments: Ford Model e, Ford Blue, and Ford Pro. Total wholesale volumes for all three segments exceeded their respective Zacks Consensus Estimates, with the Ford Blue segment being flat year-over-year. However, the Ford Model e segment and Ford Pro segment grew 14% and 1% year over year, respectively. Revenues for its three business segments also exceeded the Zacks Consensus Estimate on higher-than-expected sales. Ford expects full-year 2024 adjusted EBIT to be between $10 billion and $12 billion.
According to Reuters, the company increased its dividend in the first quarter while choosing to cut investment in expanding capacity for unprofitable electric vehicles (EVs), sending the stock price up about 6%. .
Ford CEO Jim Farley remains optimistic, predicting a strong outlook for 2024. Farley expects further double-digit hybrid growth in 2024. Ford Chief Operating Officer Kumar Galhotra says the company is poised to address quality in 2024. The cost issue increases basic strength and growth potential.
The company’s optimism is supported by the 31.17% increase in Company F’s stock price since late October 2023.
Featured ETFs
Here are some auto ETFs that investors should keep an eye on.
Fidelity Electric Vehicles and Future Transportation ETF (FDRV) – down about 1.53% in the past two weeks (as of February 7th)
First Trust S-Network Future Vehicle & Technology ETF (cars) – up about 1.29% in the past two weeks (as of February 7th)
First Trust Nasdaq Transportation ETF (FTXR) – Up about 2.10% in the past two weeks (as of February 7th)
Global X Autonomous and Electric Vehicle ETF (drive) – Up about 1.08% in the past two weeks (as of February 7th)
KraneShares Electric Vehicle and Future Mobility Index ETF (cars) – down approximately 0.92% over the past two weeks (as of February 7th)
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Ford Motor Company (F): Free Stock Analysis Report
Global X Autonomous & Electric Vehicle ETF (DRIV): ETF Research Report
General Motors Company (GM): Free Stock Analysis Report
First Trust S-Network Future Vehicles & Technology ETF (CARZ): ETF Research Report
First Trust Nasdaq Transportation ETF (FTXR): ETF Research Report
KraneShares Electric Vehicle and Future Mobility Index ETF (KARS): ETF Research Report
Fidelity Electric Vehicles and Future Transportation ETF (FDRV): ETF Research Report
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