Looking back on automobile manufacturers stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including General Motors (NYSE:GM) and its peers.
Much capital investment and technical know-how are needed to manufacture functional, safe, and aesthetically pleasing automobiles for the mass market. Barriers to entry are therefore high, and auto manufacturers with economies of scale can boast strong economic moats. However, this doesn’t insulate them from new entrants, as electric vehicles (EVs) have entered the market and are upending it. This has forced established manufacturers to not only contend with emerging EV-first competitors but also decide how much they want to invest in these disruptive technologies, which will likely cannibalize their legacy offerings.
The 7 automobile manufacturers stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 5.4%.
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Amidst this news, automobile manufacturers stocks have had a rough stretch. On average, share prices are down 13.4% since the latest earnings results.
Best Q2: General Motors (NYSE:GM)
Founded in 1908 by William C. Durant, General Motors (NYSE:GM) offers a range of vehicles and automobiles through brands such as Chevrolet, Buick, GMC, and Cadillac.General Motors reported revenues of $47.97 billion, up 7.2% year on year. This print exceeded analysts’ expectations by 5.9%. Overall, it was a stunning quarter for the company with an impressive beat of analysts’ operating margin estimates.
Unsurprisingly, the stock is down 1.8% since reporting and currently trades at $48.67.
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Rivian (NASDAQ:RIVN)
The manufacturer of Amazon’s delivery trucks, Rivian (NASDAQ:RIVN) designs, manufactures, and sells electric adventure vehicles and commercial delivery vans.Rivian reported revenues of $1.16 billion, up 3.3% year on year, in line with analysts’ expectations. The business had an exceptional quarter with an impressive beat of analysts’ volume and operating margin estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 30% since reporting. It currently trades at $10.36.
Weakest Q2: Winnebago (NYSE:WGO)
Created to provide high-quality, affordable RVs to the post-war American family, Winnebago (NYSE:WGO) is a manufacturer of recreational vehicles, providing a range of motorhomes, travel trailers, and fifth-wheel products for outdoor and adventure lifestyles.Winnebago reported revenues of $786 million, down 12.7% year on year, falling short of analysts’ expectations by 1.5%. It was a softer quarter as it posted a miss of analysts’ earnings estimates.
Winnebago delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 3.1% since the results and currently trades at $58.43.
Ford (NYSE:F)
Established to make automobiles accessible to a broader segment of the population, Ford (NYSE:F) designs, manufactures, and sells a variety of automobiles, trucks, and electric vehicles.Ford reported revenues of $47.81 billion, up 6.3% year on year. This print topped analysts’ expectations by 6.5%. Zooming out, it was a slower quarter as it recorded a miss of analysts’ operating margin and earnings estimates.
The stock is down 19.8% since reporting and currently trades at $10.95.
Nikola (NASDAQ:NKLA)
Named after Nikola Tesla (NASDAQ:TSLA), Nikola (NASDAQ:NKLA) manufactures zero-emission vehicles, focusing on battery-electric and hydrogen fuel cell electric trucks.Nikola reported revenues of $31.32 million, up 104% year on year. This result topped analysts’ expectations by 19.6%. Overall, it was a very strong quarter as it also produced a decent beat of analysts’ operating margin and volume estimates.
Nikola achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 45.4% since reporting and currently trades at $4.26.
This content was originally published on Stock Story
