AAP & XPEV’s Q2 Results, F’s Output Cut & More

Last week, the Recreational Vehicle (RV) Industry Association came up with the shipments data for July. Markedly, the RV industry delivered the strongest ever July performance. With this, the RV industry has set a new monthly record for each of the trailing nine months. RVs are gradually evolving from being a pandemic-induced choice for traveling to a sustainable one, owing to the myriad conveniences they provide to travelers. Total shipments edged up 3.5% year over year to 44,537 units. Towable RVs rose 3.4% year over year to 40,511 units, led by a surge in conventional travel trailers units. Motorhomes also increased 3.9% year over year to 4,026 units for the month.

Last Week’s Top Stories

Advance Auto Parts AAP reported adjusted earnings of $3.4 per share for second-quarter 2021 (ended Jul 17, 2021), jumping 15.3% from the prior-year figure. The reported figure also beat the Zacks Consensus Estimate of $2.95 on higher-than-expected comps growth. For the second quarter, comparable store sales witnessed 5.8% growth against the consensus mark of a decline of 1.1%. The firm generated net revenues of $2,649.4 million, marginally topping the Zacks Consensus Estimate of $2,614 million and increasing 5.9% from the year-ago reported figure. Full-year 2021 net sales, comparable store sales growth and adjusted operating income margin are now envisioned in the band of $10.6-$10.8 billion, 6-8% and 9.2-9.4%, respectively.

XPeng XPEV reported second-quarter 2021 loss per share of 23 cents or RMB1.50, narrower than the year-ago loss of RMB 6.29 owing to higher revenues. This China-based electric vehicle maker posted revenues of $582.5 million, up a whopping 536.7% year over year. XPeng delivered 17,398 vehicles in the second quarter of 2021, skyrocketing 439% year over year. P7 Model accounted for more than 66% of the total deliveries. The firm expects third-quarter 2021 deliveries in the band of 21,500-22,500 vehicles, signaling a year-over-year uptick in the range of 150.6-162.3%. Revenues are envisioned in the range of RMB 4.8-5 billion, indicating a year-over-year jump of 141.2-151.3%.

Lithia Motors LAD announced the acquisition of Rock Honda, a Top 20 Honda New Volume Dealer in the United States. The transaction has been financed through the company’s existing on-balance sheet capacity. The latest acquisition of Honda dealership in the Inland Empire has enhanced Lithia’s presence and offerings in the Southwest region. In addition, the buyout is anticipated to add $170 million in combined annualized revenues. The latest buyout brings Lithia’s total annualized revenues acquired to date in 2021 to more than $4.9 billion, keeping the company well ahead of its schedule of network expansion.

The Goodyear Tire & Rubber Company GT teamed up with Plus, a global provider of autonomous truck technology solution. The partnership aims to provide efficient self-driving trucking solutions that would steer the logistics industry’s transformation. This collaboration will help pair Goodyear’s array of services, including connected tires, with Plus’ Level 4 autonomous driving technology to further enhance transportation efficiency and safety for semi-trucks, while reducing carbon emissions. With its dominant position in the global tire industry, Goodyear is thrilled to drive the revolution in the logistics industry with the help of Plus.

Ford F is yet again slashing production of the hot-selling F-150 pickup truck and two other vehicles due to the ongoing global crunch in semiconductor supply. The Dearborn-based automaker revealed that it plans to halt production at the Oakville Assembly Plant in Canada and Kansas City Assembly Plant in Missouri during the week of Aug 30. The Oakville plant builds the Ford Edge and Lincoln Nautilus crossovers. The Kansas City facility is responsible for the assembly of the F-150. Ford will also operate only one of the three shifts at the Dearborn truck plant in Michigan, where the profitable F-150 pickup truck is manufactured. Meanwhile, Ford is recalling 16,430 2021 Ford F-150 SuperCab pickup trucks due to improper seat belt installation. The recall affects vehicles produced from Jan 2 through May 27, 2021.

Price Performance

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

Zacks Investment Research

Image Source: Zacks Investment Research

In the last six months, all stocks have increased, apart from General Motors and Tesla. In the past week, a mixed price trend has been displayed, with AutoZone losing the most and Ford registering the maximum gain.

What’s Next in the Auto Space?

Investors are awaiting the quarterly reports of Li Auto LI, BRP Inc. DOOO and ChargePoint Holdings CHPT that are set to be announced this week. Also, stay tuned for coronavirus and chip crunch-related disruptions in the auto sector.

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Ford Motor Company (F) : Free Stock Analysis Report

The Goodyear Tire & Rubber Company (GT) : Free Stock Analysis Report

Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report

Lithia Motors, Inc. (LAD) : Free Stock Analysis Report

BRP Inc. (DOOO) : Free Stock Analysis Report

Li Auto Inc. Sponsored ADR (LI) : Free Stock Analysis Report

XPeng Inc. Sponsored ADR (XPEV) : Free Stock Analysis Report

ChargePoint Holdings, Inc. (CHPT) : Free Stock Analysis Report

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