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Will Dismal North American Market Hurt Ford's (F) Q1 Earnings?
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Dismal performance of Ford’s (F - Free Report) North American market segment — which accounts for more than two-thirds of total automotive revenues — is likely to have hurt first-quarter earnings. The company is set to release quarterly numbers on Apr 28, after the closing bell.
In the last reported quarter, wholesale unit volumes in the North American segment totaled 681,000, down 8% year over year. Revenues in the North American segment came in at $25.3 billion, indicating a decline of 2% year over year. Further, EBIT was $700 million, marking a decrease of $1,259 million from the year-ago quarter. This downside resulted mainly due to low volumes, discontinuation of sedan models and high costs related to product launches.
Ford’s trucks and SUV mix accounted for 89.5% of total automotive sales volumes from the North American market in the fourth quarter. The company delivered a record pick-up truck sales performance since 2001 during the quarter.
A Glimpse into Q1 North American Sales
Ford has been forced to shutter majority of operations across the globe due to the coronavirus crisis. With customers putting off spending on big-ticket discretionary items due to the pandemic-led uncertainty and financial crisis, the company recently issued a warning about first-quarter results. Slowdown in the economy and the discontinuation of Sedan models have lowered vehicle sales and dented margins in Ford’s major markets, including North America, China and Europe.
Notably, in first-quarter 2020, the company recorded total sales of 516,330 in the North American market, suggesting a year-over-year decline of 12.5%. Lower vehicle sales amid bleak demand for passenger cars and SUVs due to the coronavirus outbreak and stay-at-home orders in multiple states are likely to have hurt revenues in the to-be-reported quarter.
Demand for passenger cars declined 36% year over year in the quarter, majorly amid the absence of Focus and C-MAX models and discontinuation of Taurus vehicle units. Declining sales volumes of Fiesta, Fusion and GT models also resulted in declining sales of cars.
Further, demand for SUVs declined 11% to 189,720 in the first quarter. Highlights for Ford’s SUVs in the quarter include year-over-year decreases in Escape, Explorer, Flex, Edge and Expedition models, partly offset by higher vehicle sales for EcoSport.
Moreover, total truck sales in the quarter decreased 5.4% year over year to 263,757 units. Sales of F-Series totaled 186,562 pickups, recording a decline of 13.1%. The company’s hot-selling cargo vans, including Transit, Transit Connect and E-Series, came in at 54,499 units. However, Transit sales increased 15.7% in the quarter recording the best-ever performance since its launch in 2014. Notably, Ford’s truck and SUV mix — which accounted for 87.8% of total automotive sales volumes in North America — decreased 7.8% year over year.
The Zacks Consensus Estimate for revenues in the North American region — which is the most significant market for the company — is pegged at $23,237 million, indicating a decline from the year-ago figure of $25,400 million. We believe dismal revenues from the North American segment are likely to have hurt the Zacks Rank #3 (Hold) company’s first-quarter bottom line.
Ford’s Overall Earnings & Revenue Projections for Q1
The Zacks Consensus Estimate for Ford’s quarterly earnings is pegged at 4 cents a share, which suggests a 90.91% slump from the prior-year profit. Also, the Zacks Consensus Estimate for sales of $30.09 billion calls for a 19.21% decrease on a year-over-year basis.
Stocks to Consider
Here are a few stocks worth considering, as these have the right combination of elements to come up with an earnings beat this time around.
Anthem, Inc. has an Earnings ESP of +1.28% and carries a Zacks Rank #3 currently. The company is slated to release first-quarter 2020 earnings on Apr 29.
Cigna Corporation (CI - Free Report) is scheduled to release earnings figures on Apr 30. The stock has an Earnings ESP of +1.53% and currently carries a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Will Dismal North American Market Hurt Ford's (F) Q1 Earnings?
Dismal performance of Ford’s (F - Free Report) North American market segment — which accounts for more than two-thirds of total automotive revenues — is likely to have hurt first-quarter earnings. The company is set to release quarterly numbers on Apr 28, after the closing bell.
(Also read: How Badly Will Coronavirus Hit Ford's Q1 Earnings?)
Q4 Highlights for Ford’s North American Market
In the last reported quarter, wholesale unit volumes in the North American segment totaled 681,000, down 8% year over year. Revenues in the North American segment came in at $25.3 billion, indicating a decline of 2% year over year. Further, EBIT was $700 million, marking a decrease of $1,259 million from the year-ago quarter. This downside resulted mainly due to low volumes, discontinuation of sedan models and high costs related to product launches.
Ford’s trucks and SUV mix accounted for 89.5% of total automotive sales volumes from the North American market in the fourth quarter. The company delivered a record pick-up truck sales performance since 2001 during the quarter.
A Glimpse into Q1 North American Sales
Ford has been forced to shutter majority of operations across the globe due to the coronavirus crisis. With customers putting off spending on big-ticket discretionary items due to the pandemic-led uncertainty and financial crisis, the company recently issued a warning about first-quarter results. Slowdown in the economy and the discontinuation of Sedan models have lowered vehicle sales and dented margins in Ford’s major markets, including North America, China and Europe.
Notably, in first-quarter 2020, the company recorded total sales of 516,330 in the North American market, suggesting a year-over-year decline of 12.5%. Lower vehicle sales amid bleak demand for passenger cars and SUVs due to the coronavirus outbreak and stay-at-home orders in multiple states are likely to have hurt revenues in the to-be-reported quarter.
Demand for passenger cars declined 36% year over year in the quarter, majorly amid the absence of Focus and C-MAX models and discontinuation of Taurus vehicle units. Declining sales volumes of Fiesta, Fusion and GT models also resulted in declining sales of cars.
Further, demand for SUVs declined 11% to 189,720 in the first quarter. Highlights for Ford’s SUVs in the quarter include year-over-year decreases in Escape, Explorer, Flex, Edge and Expedition models, partly offset by higher vehicle sales for EcoSport.
Moreover, total truck sales in the quarter decreased 5.4% year over year to 263,757 units. Sales of F-Series totaled 186,562 pickups, recording a decline of 13.1%. The company’s hot-selling cargo vans, including Transit, Transit Connect and E-Series, came in at 54,499 units. However, Transit sales increased 15.7% in the quarter recording the best-ever performance since its launch in 2014. Notably, Ford’s truck and SUV mix — which accounted for 87.8% of total automotive sales volumes in North America — decreased 7.8% year over year.
The Zacks Consensus Estimate for revenues in the North American region — which is the most significant market for the company — is pegged at $23,237 million, indicating a decline from the year-ago figure of $25,400 million. We believe dismal revenues from the North American segment are likely to have hurt the Zacks Rank #3 (Hold) company’s first-quarter bottom line.
Ford’s Overall Earnings & Revenue Projections for Q1
The Zacks Consensus Estimate for Ford’s quarterly earnings is pegged at 4 cents a share, which suggests a 90.91% slump from the prior-year profit. Also, the Zacks Consensus Estimate for sales of $30.09 billion calls for a 19.21% decrease on a year-over-year basis.
Stocks to Consider
Here are a few stocks worth considering, as these have the right combination of elements to come up with an earnings beat this time around.
Anthem, Inc. has an Earnings ESP of +1.28% and carries a Zacks Rank #3 currently. The company is slated to release first-quarter 2020 earnings on Apr 29.
The Allstate Corporation (ALL - Free Report) is set to report quarterly numbers on May 6. The company has an Earnings ESP of +2.18% and holds a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cigna Corporation (CI - Free Report) is scheduled to release earnings figures on Apr 30. The stock has an Earnings ESP of +1.53% and currently carries a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>