Auto Roundup: THO and RIVN quarterly results, GPI acquisition and more

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February data on auto sales in China – the world’s largest auto market – was released last week. According to the China Association of Automobile Manufacturers, vehicle sales in the country rose 18.7% year-on-year to 1.74 million units, continuing last month’s rise, which ended eight consecutive monthly declines. Sales of new-energy vehicles jumped 197.5% year-on-year to 368,000 units in February.

On the news front, the American automotive giant General Motors GM has worked with POSCO Chemical to establish a new plant in Quebec to produce battery materials for electric cars. Then there were earnings releases from the recreational vehicle maker Thor Industries THO and upstart of the electric vehicle Rivian Automotive BANK. While Thor delivered a full beat, Rivian suffered a bigger than expected quarterly loss. Meanwhile, Group 1 Automotive GPI is expected to add $435 million in annualized revenue with the acquisition of a Toyota dealership in Austin. Oshkosh Corporation OSK also rose to prominence when its subsidiary acquired Cartseeker to enhance its technology capabilities.

Summary of important news of the week

General Motors and POSCO announced that they were working with the governments of Canada and Quebec to build a new plant in Bécancour. The site, worth an estimated $400 million (C$500 million), will produce cathode active material (“CAM”) for GM’s Ultium batteries, which will power its electric vehicle models, including the Chevrolet Silverado EV, the GMC HUMMER EV and the Cadillac LYRIQ.

According to plans, the Quebec site will process CAM, a crucial battery material made up of components such as treated nickel, lithium and other materials, representing around 40% of the cost of a battery cell. The facility will allow GM to cement its place in the electric vehicle supply chain, as it is also set to launch Canada’s first complete electric vehicle manufacturing plant in Ingersoll, Ontario later this year. . POSCO is also excited to expand its battery materials sourcing capability across North America by establishing a cathode materials plant in Canada.

Thor posted adjusted earnings of $4.79 per share for the second quarter of fiscal 2022, which beat Zacks’ consensus estimate of $3.40. This outperformance can be attributed to higher than expected revenues in the North American towable and motorized RV segments. Net income jumped 101.3% from earnings of $2.38 per share a year earlier. THO posted revenue of $3,875 million for the quarter under review, beating Zacks’ consensus estimate of $3,553 million. Revenue also recorded a year-on-year increase of 42.1%.

As of January 31, 2022, Thor had cash and cash equivalents of $330.3 million and long-term debt of $2,167.7 million. Consolidated backlog at the end of the quarter was $17.73 billion, reflecting a 60% year-over-year increase. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Rivian suffered an adjusted net loss of $2.43 per share in the fourth quarter of 2021, higher than the Zacks consensus estimate of $1.58. Total revenue came in at $54 million, surpassing the consensus mark of $50 million. The company delivered 909 vehicles during the quarter. RIVN generated negative gross profit of $383 million in the quarter under review. Operating expenses totaled $2,071 million, up from $353 million incurred in the comparable period a year ago.

Rivian ended 2021 with $18.4 billion in cash, cash equivalents and restricted cash. Capital expenditures for the fourth quarter totaled $455 million. Given the increase in net cash used in operating activities year-over-year and massive capital expenditures, Rivian recorded negative free cash flow of $1,541 million in the fourth quarter of 2021, deteriorating from negative 574 million in the corresponding period of 2020. RIVN aims to deliver 25,000 vehicles this year.

Group 1 announced the acquisition of Charles Maund Toyota dealership in Austin, TX. The buyout will strengthen Group 1’s existing portfolio of 13 franchises in the fast-growing Central Texas market area of ​​Austin and San Antonio. Austin’s market strength, combined with that of Toyota, promises a lucrative growth pool for Group 1. The dealership promises to generate $435 million in annual revenue and is the 16th Toyota store in GPI’s US portfolio.

In separate news, Group 1 has extended its five-year, $2 billion revolving credit facility with 21 financial institutions to $2.4 billion, bolstering Group 1’s finances and liquidity. is due to expire in March 2027. The facility will provide $1.6 billion for inventory inventory plan funding and $349 million for working capital, acquisitions and general corporate purposes, which may be extended to a maximum of $500 million.

oshkoshMcNeilus Truck and Manufacturing, Inc., a subsidiary of McNeilus, has acquired the CartSeeker curbside automation product from Eagle Vision Systems, Inc. and Waterloo Controls, Inc. McNeilus, to design and develop heavy-duty truck technologies and advancements that will change the face of the waste disposal industry, has set out to invest in waste collection vehicle automation technologies that complement its vision.

CartSeeker is a patented AI-based technology that identifies and locates curbside trash carts and automates the operation of the truck’s robotic lift arm without using a joystick. This technology was first showcased on the McNeilus Zero Radius sideloader at the Waste Expo in Las Vegas in June 2021. The technology will enable Oshkosh’s arm to deliver high-performance solutions that are built on operational simplicity.

Price performance

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

Image source: Zacks Investment Research

What’s new in the Auto Area?

Industry watchers will be keeping an eye on February passenger vehicle registrations to be released this week by the Association of European Automobile Manufacturers. Also, stay tuned for the usual automotive industry press releases.

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Thor Industries, Inc. (THO): Free Stock Analysis Report

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Oshkosh Corporation (OSK): Free Stock Analysis Report

Rivian Automotive, Inc. (RIVN): Free Inventory Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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