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Why Is Ford (F) Down 2.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Ford (F - Free Report) . Shares have lost about 2.6% 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 due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Ford Q2 Earnings Lag Estimates & Fall Y/Y, View Slashed
Ford reported second-quarter 2018 adjusted earnings per share of 27 cents, missing the Zacks Consensus Estimate of 31 cents per share. Adjusted earnings in the prior-year quarter was 56 cents per share. The results were impacted by challenges faced by the company in China market and North American production disruption.
Ford is continuing with its strategy of redesigning business models by reallocating capital to augment competitiveness and attain higher returns. Second-quarter net income was $1.1 billion, reflecting a decrease of $0.9 billion from the year-ago quarter.
During the reported quarter, Ford logged automotive revenues of $35.9 billion, down from the prior-year quarter figure of $37.1 billion. Its Zacks Consensus Estimate for revenues was $35.5 billion.
Ford Automotive
During the reported quarter, wholesale volumes at the Ford Automotive segment decreased158,000 units to 1.49 million. Earnings before income and taxes (EBIT) decreased to $1.2 billion from $2.4 billion in the year-ago quarter.
In North America, revenues decreased $0.8 billion to $23.7 billion during the reported quarter. Wholesale volumes decreased 65,000 units year over year to 742,000. Further, EBIT decreased to $1.8 billion from $2.4 billion in second-quarter 2017.
In South America, revenues remained unchanged at $1.5 billion. Wholesale volumes rose 3,000 to 96,000 units. Pre-tax loss amounted to $178 million.
In Europe, revenues increased $0.5 billion to $7.6 billion. Wholesale volumes decreased 8,000 to around 367,000 units. The region incurred Pre-tax loss of $73 million during the quarter.
In the Middle East & Africasegment, revenues rose $0.2 billion to $0.8 billion. Wholesale volumes increased 3,000 to 27,000 units. The region recorded EBIT of $49 million.
In the Asia-Pacific region, revenues decreased $1.1 billion to $2.3 billion. Wholesale volumes declined 91,000 to 261,000 units. The region incurred pre-tax loss of $394 million.
Financial Services
Ford Credit generated EBT of $645 million, up from $619 million in the prior-year quarter.
Financial Position
Ford had cash and cash equivalents of $16.8 billion as of Jun 30, 2018, down from $17.9 billion as of Mar 31, 2018.
2018 Guidance
The company expects 2018 adjusted EPS of $1.30-$1.50, down from the earlier expectation of $1.45-$1.70. The company has revised down the earnings expectation primarily due to challenging quarter in Asia Pacific and Europe regions.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimate. The consensus estimate has shifted -18.07% due to these changes.
VGM Scores
Currently, Ford has a subpar Growth Score of D, however its momentum is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than momentum investors.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Ford has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Ford (F) Down 2.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Ford (F - Free Report) . Shares have lost about 2.6% 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 due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Ford Q2 Earnings Lag Estimates & Fall Y/Y, View Slashed
Ford reported second-quarter 2018 adjusted earnings per share of 27 cents, missing the Zacks Consensus Estimate of 31 cents per share. Adjusted earnings in the prior-year quarter was 56 cents per share. The results were impacted by challenges faced by the company in China market and North American production disruption.
Ford is continuing with its strategy of redesigning business models by reallocating capital to augment competitiveness and attain higher returns. Second-quarter net income was $1.1 billion, reflecting a decrease of $0.9 billion from the year-ago quarter.
During the reported quarter, Ford logged automotive revenues of $35.9 billion, down from the prior-year quarter figure of $37.1 billion. Its Zacks Consensus Estimate for revenues was $35.5 billion.
Ford Automotive
During the reported quarter, wholesale volumes at the Ford Automotive segment decreased158,000 units to 1.49 million. Earnings before income and taxes (EBIT) decreased to $1.2 billion from $2.4 billion in the year-ago quarter.
In North America, revenues decreased $0.8 billion to $23.7 billion during the reported quarter. Wholesale volumes decreased 65,000 units year over year to 742,000. Further, EBIT decreased to $1.8 billion from $2.4 billion in second-quarter 2017.
In South America, revenues remained unchanged at $1.5 billion. Wholesale volumes rose 3,000 to 96,000 units. Pre-tax loss amounted to $178 million.
In Europe, revenues increased $0.5 billion to $7.6 billion. Wholesale volumes decreased 8,000 to around 367,000 units. The region incurred Pre-tax loss of $73 million during the quarter.
In the Middle East & Africasegment, revenues rose $0.2 billion to $0.8 billion. Wholesale volumes increased 3,000 to 27,000 units. The region recorded EBIT of $49 million.
In the Asia-Pacific region, revenues decreased $1.1 billion to $2.3 billion. Wholesale volumes declined 91,000 to 261,000 units. The region incurred pre-tax loss of $394 million.
Financial Services
Ford Credit generated EBT of $645 million, up from $619 million in the prior-year quarter.
Financial Position
Ford had cash and cash equivalents of $16.8 billion as of Jun 30, 2018, down from $17.9 billion as of Mar 31, 2018.
2018 Guidance
The company expects 2018 adjusted EPS of $1.30-$1.50, down from the earlier expectation of $1.45-$1.70. The company has revised down the earnings expectation primarily due to challenging quarter in Asia Pacific and Europe regions.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimate. The consensus estimate has shifted -18.07% due to these changes.
VGM Scores
Currently, Ford has a subpar Growth Score of D, however its momentum is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than momentum investors.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Ford has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.