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Ford (F) Down 2% Since Earnings Report: Can It Rebound?

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About a month has gone by since the last earnings report for Ford Motor Company (F - Free Report) . Shares have lost about 2% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Ford Drives Past Q2 Earnings Estimates, Revenues Miss

Ford posted adjusted earnings per share of 56 cents in the second quarter of 2017. The reported figure was 4 cents higher than the year-ago figure. Also, earnings surpassed the Zacks Consensus Estimate of 44 cents per share. Results were driven by lower tax rate.

Adjusted pre-tax profit was $2.5 billion, reflecting a decline of $0.5 billion from the year-ago quarter.

Second-quarter net income came in at $2 billion, increasing $0.1 billion from the year-ago quarter.

Ford logged automotive revenues of $37.1 billion, lagging the Zacks Consensus Estimate of $38 billion. Automotive revenues in the prior year-ago quarter were $36.9 billion.

Ford Automotive

Wholesale volumes at the Ford Automotive segment decreased 43,000 units to 1.65 million. Pre-tax profit declined to $2.2 billion from $2.8 billion in the year- ago quarter.

In North America, revenues increased $0.7 billion to $24.5 billion. Wholesale volumes declined 1% year over year to 807,000 units. Further, pre-tax profit decreased to $2.2 billion from $2.7 billion in second-quarter 2016.

In South America, revenues increased $0.2 billion to $1.5 billion. Wholesale volumes rose 12% to 93,000 units. Pre-tax loss amounted to $185 million, narrower than $265 million in the prior-year quarter. The loss was due to an improving but weak economy.

In Europe, revenues declined $1 billion to $7.1 billion. Wholesale volumes decreased by 55,000 year over year to 375,000 units. The region recorded pre-tax profit of $88 million, decreasing $379 million from the prior-year quarter.

In the Middle East & Africa segment, revenues declined 0.4 billion year over year to $0.6 billion. Wholesale volumes plunged 14,000 units to 24,000 units. The region reported a pre-tax loss of $53 million, narrowing down from the prior-year quarter loss of $65 million.

In the Asia-Pacific region, revenues of $3.4 billion improved 21% year over year. Wholesale volumes rose 7% to 352,000 units. The Asia-Pacific region reported a pre-tax profit of $143 million, up from the year-ago quarter loss of $8 million.

Financial Services

Ford Credit recorded best pre-tax profit since 2011. The unit recorded around 55% year-over-year increase in pre-tax profit during the quarter.

Financial Position

Ford had cash and cash equivalents of $16.2 billion as of Jun 30, 2017, down from $17.1 billion as of Jun 30, 2016.

2017 Guidance

The company expects 2017 adjusted EPS to be in the range of $1.65–$1.85. Also, the company expects adjusted effective tax rate to be 15%.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

Ford Motor Company Price and Consensus

VGM Scores

At this time, Ford's stock has a nice Growth Score of B, though it lags a bit on the momentum front with a C. 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.

Based on our scores, the stock is primarily suitable for value investors while also being suitable for those looking for growth and to a lesser degree momentum.

Outlook

Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.


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