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What's in the Cards for Ford (F) this Earnings Season?
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Ford Motor Co. (F - Free Report) is set to release second-quarter 2016 results on Jul 28. Last quarter, the company posted a positive earnings surprise of 58.14%. Let’s see how things have shaped up for the forthcoming announcement.
Factors Influencing this Quarter
Ford is witnessing strong sales volumes in all major markets. This will boost the automaker’s revenues. The company expects 2016 pre-tax profit, earnings per share, Automotive revenue and Automotive operating margin to be equal to or higher than 2015 levels. Also, North America, Europe, Middle East & Africa, and the Asia Pacific segments are expected to be profitable this year. Results from Europe and the Asia Pacific are anticipated to witness a year-over-year improvement in 2016, while that from Middle East & Africa will likely be equal to or higher than 2015 levels. Better annual guidance raises expectations of improvement in the quarterly performance as well.
However, Ford, like some other automakers, has been recalling its vehicles regularly to fix safety issues. Frequent product recalls not only reduce consumers’ confidence in a brand, but also add to expenses. In addition, Ford has been replacing its older models and rolling out new ones. This involves substantial expenditure, leading to high structural costs. Higher costs will adversely affect the company’s profits.
Earnings Whispers
Our proven model does not conclusively show that Ford is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. Ford’s Earnings ESP is +3.33% because the Most Accurate estimate is 62 cents, while the Zacks Consensus Estimate is pegged at 60 cents.
Zacks Rank: Ford carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Westport Fuel Systems Inc. (WPRT - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Aug 3.
Allison Transmission Holdings, Inc. (ALSN - Free Report) has an Earnings ESP of +6.35% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Jul 27.
Visteon Corporation (VC - Free Report) has an Earnings ESP of +5.97% and a Zacks Rank #3. The company’s second-quarter 2016 results are expected to release on Jul 28.
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What's in the Cards for Ford (F) this Earnings Season?
Ford Motor Co. (F - Free Report) is set to release second-quarter 2016 results on Jul 28. Last quarter, the company posted a positive earnings surprise of 58.14%. Let’s see how things have shaped up for the forthcoming announcement.
Factors Influencing this Quarter
Ford is witnessing strong sales volumes in all major markets. This will boost the automaker’s revenues. The company expects 2016 pre-tax profit, earnings per share, Automotive revenue and Automotive operating margin to be equal to or higher than 2015 levels. Also, North America, Europe, Middle East & Africa, and the Asia Pacific segments are expected to be profitable this year. Results from Europe and the Asia Pacific are anticipated to witness a year-over-year improvement in 2016, while that from Middle East & Africa will likely be equal to or higher than 2015 levels. Better annual guidance raises expectations of improvement in the quarterly performance as well.
However, Ford, like some other automakers, has been recalling its vehicles regularly to fix safety issues. Frequent product recalls not only reduce consumers’ confidence in a brand, but also add to expenses. In addition, Ford has been replacing its older models and rolling out new ones. This involves substantial expenditure, leading to high structural costs. Higher costs will adversely affect the company’s profits.
Earnings Whispers
Our proven model does not conclusively show that Ford is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. Ford’s Earnings ESP is +3.33% because the Most Accurate estimate is 62 cents, while the Zacks Consensus Estimate is pegged at 60 cents.
Zacks Rank: Ford carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
FORD MOTOR CO Price and EPS Surprise
FORD MOTOR CO Price and EPS Surprise | FORD MOTOR CO Quote
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Westport Fuel Systems Inc. (WPRT - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Aug 3.
Allison Transmission Holdings, Inc. (ALSN - Free Report) has an Earnings ESP of +6.35% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Jul 27.
Visteon Corporation (VC - Free Report) has an Earnings ESP of +5.97% and a Zacks Rank #3. The company’s second-quarter 2016 results are expected to release on Jul 28.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>