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Ford Motor Company (F) Down 10.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Ford Motor Company (F - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ford Motor Company due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ford Posts 5th Straight Earnings Beat in Q2
Ford posted second-quarter 2021 adjusted earnings of 13 cents per share against the Zacks Consensus Estimate of a loss of 11 cents. The bottom line turned around from the year-ago loss of 35 cents per share. Higher-than-expected revenues, primarily in Europe and North America markets, led to the outperformance. Its consolidated second-quarter revenues came in at $26.8 billion, up 38% year over year.
Segmental Performance
For the second quarter, total wholesale volume in the Ford Automotive segment increased 18% year over year to 764,000 units. Revenues of the segment rose 45% year over year to $24.1 billion, outpacing the Zacks Consensus estimate of $21.5 billion. Loss before interest and taxes came in at $95 million, way narrower than the year-ago loss of $2,089 million.
In North America, revenues surged 37% year on year to $15 billion for the reported quarter. The metric also surpassed the Zacks Consensus Estimate of $14.3 billion. Wholesale volume edged up 20% from the year-earlier quarter to 327,000 units. EBIT totaled $194 million, turning around from a loss of $974 million in the corresponding quarter of 2020, thanks to favorable pricing strategy and product mix.
In South America, revenues rose 124% year over year to $0.5 billion for the second quarter and topped the consensus mark of $0.3 billion. Wholesale volume grew 25% from the year-ago quarter to 18,000 units. The unit’s pretax loss narrowed from $165 million in the prior-year quarter to $86 million amid cost cut and rejig efforts.
In Europe, revenues soared 55% year on year to $5.6 billion for the June-end quarter, topping the consensus mark of $4.5 billion. Wholesale volumes scaled up 18% year over year to 182,000 units and pretax loss totaled $284 million, narrower than the year-ago loss of $664 million, thanks to aggressive restructuring initiatives.
In China, revenues declined 31% year over year to $0.6 billion for the reported quarter. Wholesale volume tapered off 11% from the prior-year figure to 150,000 units. However, pretax loss narrowed from $136 million a year ago to $123 million for the quarter under review.
In the International Markets Group, revenues were up a whopping 141% from the year-ago figure to $2.5 billion. Wholesale volume rallied 138% from the prior-year level to 87,000 units and pretax earnings totaled $204 million against $150 million loss incurred in the comparable year-ago period.
Second-quarter revenues from the Ford Credit unit declined 5% year over year to $2,603 million. Revenues from Ford Mobility came in at $21 million, tripling from the comparable year-ago level.
Financial Position
Ford reported negative adjusted free cash flow (FCF) of $5,125 million during the quarter, which deteriorated from the prior-year negative FCF of $4,758 million. It had cash and cash equivalents of $22,955 million as of Jun 30, 2021 compared with $25,243 million on Dec 31, 2020. Automotive long-term debt increased to $23,776 million on Jun 30, 2021 from $22,633 million as of 2020-end.
Guidance
Ford raised EBIT and FCF projections for 2021. FCF is now envisioned in the band of $4-$5 billion, up from previous guided range of $500 million to $1.5 billion. The company now forecasts full-year 2021 EBIT within $9-$10 billion, higher than the prior view of $5.5-$6.5 billion. While second-half 2021 sales volume is likely to grow 30% from the first half, operating profit will be weaker than the first-half level due to higher commodity costs, lower earnings by Ford Credit and investments in the Ford+ plan. Weaker EBIT levels in second-half 2021 will reflect a non-cash gain of $902 million on Ford’s investment in Rivian that was booked in first-quarter 2021.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 12.5% due to these changes.
VGM Scores
At this time, Ford Motor Company has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ford Motor Company has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Ford Motor Company (F) Down 10.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Ford Motor Company (F - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ford Motor Company due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ford Posts 5th Straight Earnings Beat in Q2
Ford posted second-quarter 2021 adjusted earnings of 13 cents per share against the Zacks Consensus Estimate of a loss of 11 cents. The bottom line turned around from the year-ago loss of 35 cents per share. Higher-than-expected revenues, primarily in Europe and North America markets, led to the outperformance. Its consolidated second-quarter revenues came in at $26.8 billion, up 38% year over year.
Segmental Performance
For the second quarter, total wholesale volume in the Ford Automotive segment increased 18% year over year to 764,000 units. Revenues of the segment rose 45% year over year to $24.1 billion, outpacing the Zacks Consensus estimate of $21.5 billion. Loss before interest and taxes came in at $95 million, way narrower than the year-ago loss of $2,089 million.
In North America, revenues surged 37% year on year to $15 billion for the reported quarter. The metric also surpassed the Zacks Consensus Estimate of $14.3 billion. Wholesale volume edged up 20% from the year-earlier quarter to 327,000 units. EBIT totaled $194 million, turning around from a loss of $974 million in the corresponding quarter of 2020, thanks to favorable pricing strategy and product mix.
In South America, revenues rose 124% year over year to $0.5 billion for the second quarter and topped the consensus mark of $0.3 billion. Wholesale volume grew 25% from the year-ago quarter to 18,000 units. The unit’s pretax loss narrowed from $165 million in the prior-year quarter to $86 million amid cost cut and rejig efforts.
In Europe, revenues soared 55% year on year to $5.6 billion for the June-end quarter, topping the consensus mark of $4.5 billion. Wholesale volumes scaled up 18% year over year to 182,000 units and pretax loss totaled $284 million, narrower than the year-ago loss of $664 million, thanks to aggressive restructuring initiatives.
In China, revenues declined 31% year over year to $0.6 billion for the reported quarter. Wholesale volume tapered off 11% from the prior-year figure to 150,000 units. However, pretax loss narrowed from $136 million a year ago to $123 million for the quarter under review.
In the International Markets Group, revenues were up a whopping 141% from the year-ago figure to $2.5 billion. Wholesale volume rallied 138% from the prior-year level to 87,000 units and pretax earnings totaled $204 million against $150 million loss incurred in the comparable year-ago period.
Second-quarter revenues from the Ford Credit unit declined 5% year over year to $2,603 million. Revenues from Ford Mobility came in at $21 million, tripling from the comparable year-ago level.
Financial Position
Ford reported negative adjusted free cash flow (FCF) of $5,125 million during the quarter, which deteriorated from the prior-year negative FCF of $4,758 million. It had cash and cash equivalents of $22,955 million as of Jun 30, 2021 compared with $25,243 million on Dec 31, 2020. Automotive long-term debt increased to $23,776 million on Jun 30, 2021 from $22,633 million as of 2020-end.
Guidance
Ford raised EBIT and FCF projections for 2021. FCF is now envisioned in the band of $4-$5 billion, up from previous guided range of $500 million to $1.5 billion. The company now forecasts full-year 2021 EBIT within $9-$10 billion, higher than the prior view of $5.5-$6.5 billion. While second-half 2021 sales volume is likely to grow 30% from the first half, operating profit will be weaker than the first-half level due to higher commodity costs, lower earnings by Ford Credit and investments in the Ford+ plan. Weaker EBIT levels in second-half 2021 will reflect a non-cash gain of $902 million on Ford’s investment in Rivian that was booked in first-quarter 2021.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 12.5% due to these changes.
VGM Scores
At this time, Ford Motor Company has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ford Motor Company has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.