|By PR Newswire||
|February 7, 2014 09:30 AM EST||
CHICAGO, Feb. 7, 2014 /PRNewswire/ -- Today, Zacks Equity Research discusses the Autos, including Toyota Motor Corp. (NYSE:TM-Free Report), General Motors Company (NYSE:GM-Free Report), Volkswagen AG (OTC:VLKAY-Free Report) and Ford Motor Co. (NYSE:F-Free Report).
The automobile market recovered significantly in 2013 from the impact of the global financial crisis, buoyed by economic recovery and pent-up demand in the U.S. and Asia.
Japanese automaker Toyota Motor Corp. (NYSE:TM-Free Report) retained its market leading position in terms of global sales volume and sold 9.98 million vehicles during the year, up 2% over 2012 level. General Motors Company (NYSE:GM-Free Report) and Volkswagen AG (OTC:VLKAY-Free Report) occupied the second and third positions, with sales volumes of 9.71 million and 9.7 million vehicles, respectively.
General Motors was the leading automaker in the U.S. in 2013 with annual sales of 2.8 million units. Ford Motor Co. (NYSE:F-Free Report) came in second with 2.5 million units, while Toyota slipped into the third position with registered sales of 2.2 million units.
Zacks Industry Rank – Neutral Outlook
The distinctive attributes of the auto industry prompted us to have a dedicated sector for the industry in our database. The automobile sector is one of the 16 Zacks sectors, unlike the S&P classification where autos are in the Consumer Discretionary sector (the S&P has 10 sectors vs. 16 for Zacks).
At the expanded classification level, the Zacks auto sector is divided into five industries: Auto-Domestic, Auto-Foreign, Auto/Truck-Original, Auto/Truck-Replacement and Engines. The level of sensitivity and exposure to different stages of the economic cycle vary for each industry. The sector's retail operations are part of the Zacks Retail sector in two industries -- one for Automobile/Trucks and the other for Auto Parts.
The current Zacks Industry Rank for Auto-Domestic is #184, Auto-Foreign is #231, Auto/Truck-Original is #54, Auto/Truck-Replacement is #23, Engines is #28, Retail/Wholesale Auto/Truck is #101 and Retail/Wholesale-Auto Parts is #224. As a reference point, the outlook for industries with Zacks Industry Rank of #88 and lower is 'Positive,' between #89 and #176 is 'Neutral' and #177 and higher is 'Negative.'
This implies that the general outlook for all auto-related industries varies significantly. We rank all 260-plus industries in the 16 Zacks sectors based on the earnings outlook and fundamental strength of the constituent companies in each industry.
Sector Level Earnings Trend
The auto sector is expected to contribute 2% of total S&P 500 earnings in 2013, more than its 1.5% market cap weightage in the index at present.
Looking at the overall results of the Auto sector, earnings surged 32.3% year over year in the third quarter of 2013, an impressive performance compared with the 18.5% year-over-year rise in the previous quarter. Total revenue increased 7% year over year in the third quarter versus a 4.7% year-over-year gain in the second quarter.
Based on the latest available information, 30% of the sector participants have already reported December quarter results with a beat ratio of 66.7% for both earnings and revenue. Total earnings for the companies that have reported so far have shown an 8.9% year-over-year increase on a 3.4% rise in revenues.
Auto sector earnings are expected to be up 20.3% in the fourth quarter while revenues are forecast to improve 4.4%, placing it among the winners in a whole bunch of 16 sectors covered by Zacks.
For the first quarter of 2014, earnings are expected to inch down 1.4% and decline further by 0.9% in the second quarter. Revenues are expected to move up 3.2% in the first quarter and 3.8% in the second quarter.
In 2014, earnings are expected to surge 11%, again putting it among the best performing sectors. However, revenue growth in 2014 is expected to be a modest 2.7%.
For more information about earnings for this sector and others, please read our 'Earnings Trends' report.
Market share concentration among a few companies makes the automobile sector highly competitive. The top 10 global automakers account for nearly 94% of total vehicles sold in the U.S. To remain competitive, automakers need to design technologically advanced and economic vehicles that cater to consumers in both mature and emerging markets.
To achieve this goal, Ford has undertaken the "One Manufacturing" strategy, which aims at producing multiple models in worldwide plants in order to reduce production expenditure and adapt swiftly to changing consumer preferences. The automaker aims to manufacture an average of 4.5 models at each of its plants by 2015.
Automakers are also concentrating on providing optional features (which will save gas) on small vehicles in order to attract buyers. The inclusion of these features provides scope for higher revenue generation from small cars, which have lower profit margins relative to large trucks.
In an attempt to reduce costs, automakers continue to shift production facilities from high-cost regions such as North America and the European Union to low-cost regions such as China, India and South America. According to a study by CSM Worldwide, China and South America together will contribute more than 50% of the growth in global light vehicle production between 2008 and 2015.
Apart from individual company strategies, the government plays a pivotal role in molding the future of global auto manufacturers. The energy and environmental policies of different countries will play a major role in shaping the future of the auto industry.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Apr. 24, 2017 02:45 AM EDT Reads: 788
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Apr. 24, 2017 02:45 AM EDT Reads: 763
Everyone wants to use containers, but monitoring containers is hard. New ephemeral architecture introduces new challenges in how monitoring tools need to monitor and visualize containers, so your team can make sense of everything. In his session at @DevOpsSummit, David Gildeh, co-founder and CEO of Outlyer, will go through the challenges and show there is light at the end of the tunnel if you use the right tools and understand what you need to be monitoring to successfully use containers in your...
Apr. 24, 2017 01:15 AM EDT Reads: 1,673
Developers want to create better apps faster. Static clouds are giving way to scalable systems, with dynamic resource allocation and application monitoring. You won't hear that chant from users on any picket line, but helping developers to create better apps faster is the mission of Lee Atchison, principal cloud architect and advocate at New Relic Inc., based in San Francisco. His singular job is to understand and drive the industry in the areas of cloud architecture, microservices, scalability ...
Apr. 24, 2017 01:00 AM EDT Reads: 3,222
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at Dell EMC, introduced a methodology for capturing, enriching and sharing data (and analytics) across the organization...
Apr. 24, 2017 12:30 AM EDT Reads: 6,328
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Apr. 24, 2017 12:00 AM EDT Reads: 1,014
Grape Up is a software company, specialized in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the USA and Europe, we work with a variety of customers from emerging startups to Fortune 1000 companies.
Apr. 23, 2017 11:45 PM EDT Reads: 1,987
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
Apr. 23, 2017 11:30 PM EDT Reads: 2,183
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
Apr. 23, 2017 11:00 PM EDT Reads: 1,595
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
Apr. 23, 2017 10:30 PM EDT Reads: 1,964
Multiple data types are pouring into IoT deployments. Data is coming in small packages as well as enormous files and data streams of many sizes. Widespread use of mobile devices adds to the total. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the tools and environments that are being put to use in IoT deployments, as well as the team skills a modern enterprise IT shop needs to keep things running, get a handle on all this data, and deli...
Apr. 23, 2017 09:45 PM EDT Reads: 1,961
The age of Digital Disruption is evolving into the next era – Digital Cohesion, an age in which applications securely self-assemble and deliver predictive services that continuously adapt to user behavior. Information from devices, sensors and applications around us will drive services seamlessly across mobile and fixed devices/infrastructure. This evolution is happening now in software defined services and secure networking. Four key drivers – Performance, Economics, Interoperability and Trust ...
Apr. 23, 2017 09:30 PM EDT Reads: 3,545
In recent years, containers have taken the world by storm. Companies of all sizes and industries have realized the massive benefits of containers, such as unprecedented mobility, higher hardware utilization, and increased flexibility and agility; however, many containers today are non-persistent. Containers without persistence miss out on many benefits, and in many cases simply pass the responsibility of persistence onto other infrastructure, adding additional complexity.
Apr. 23, 2017 08:45 PM EDT Reads: 2,007
Cloud Expo, Inc. has announced today that Aruna Ravichandran, vice president of DevOps Product and Solutions Marketing at CA Technologies, has been named co-conference chair of DevOps at Cloud Expo 2017. The @DevOpsSummit at Cloud Expo New York will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and @DevOpsSummit at Cloud Expo Silicon Valley will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Apr. 23, 2017 06:45 PM EDT Reads: 2,317
Most companies are adopting or evaluating container technology - Docker in particular - to speed up application deployment, drive down cost, ease management and make application delivery more flexible overall. As with most new architectures, this dream takes a lot of work to become a reality. Even when you do get your application componentized enough and packaged properly, there are still challenges for DevOps teams to making the shift to continuous delivery and achieving that reduction in cost ...
Apr. 23, 2017 05:30 PM EDT Reads: 3,606