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Ford (F) Down 4.7% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Ford Motor Company (F - Free Report) . Shares have lost about 4.7% 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 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 drivers.
Ford Earnings & Revenues Beat in Q1, Guidance Still Soft
Ford posted adjusted earnings per share of $0.39 in the first quarter of 2017. The reported figure was $0.29 lower than that in first-quarter 2016 (excluding special items). However, earnings surpassed the Zacks Consensus Estimate of $0.34 per share. Pre-tax income (excluding special items) was $2.2 billion, about $1.6 billion lower than the year-ago quarter figure.
Net profit attributable to Ford was $1.6 billion, down $0.9 billion from the year-ago quarter figure.
Ford recorded revenues of $36.48 billion, surpassing the Zacks Consensus Estimate of $34.78 billion. Revenues were $1.3 billion higher than a year ago.
Ford Automotive
Ford recorded Automotive revenues of $36.48 billion. Revenues increased $1.3 billion on a year-over-year basis. Wholesale volumes decreased 17,000 units to stand at 1.7 million. Pre-tax profit declined to $2 billion from $3.5 billion a year ago.
In North America, revenues inched up 0.4% to $24 billion. Wholesale volumes declined 5.3% year over year to 771,000 units due to lower dealer-stock build. Further, pre-tax profit decreased to $2 billion from $3.1 billion due to commodity headwinds and higher investments, partly offset by net efficiencies across all other remaining cost categories.
In South America, revenues increased 21.4% to $1.1 billion. Wholesale volumes rose 11.1% to 70,000 units. Pre-tax loss amounted to $244 million, narrower than $256 million in the prior-year quarter. The loss was due to an improving but still weak economy.
In Europe, revenues rose 10.1% to $7.6 billion. Wholesale volumes increased 12.5% year over year to 449,000 units. The region recorded a pre-tax profit of $176 million, compared with $434 million a year ago. The downside was driven by currency headwinds as well as higher costs and investments.
In the Middle East & Africa segment, revenues declined 33.3% year over year to $0.6 billion. Wholesale volumes plunged 34.8% to 30,000 units. The region reported a pre-tax loss of $80 million, far wider than $14 million in the year-ago quarter.
In the Asia-Pacific region, revenues of $3.2 billion improved 18.5% year over year. Wholesale volumes declined 3.8% to 383,000 units. Market share in the region was 3.4%, compared with the year-ago level of 3.8%. The Asia-Pacific region reported a pre-tax profit of $124 million, down from $220 million in the year-ago quarter.
Financial Services
Ford Credit reported a 6.4% decline in pre-tax profit to $481 million in the first quarter of 2017, as expected.
Financial Position
Ford had cash and cash equivalents of $17.8 billion as of Mar 31, 2017, up from $15.9 billion as of Dec 31, 2016. As of Mar 31, 2017, Automotive debt increased to $16.2 billion from $15.9 billion as of Dec 31, 2016.
In first-quarter 2017, the company’s cash flow from continuing operations decreased to $4.1 billion from $4.3 billion a year ago. Capital expenditures declined to $1.5 billion from $1.7 billion in first-quarter 2016.
2017 Guidance
Ford expects 2017 pre-tax profit to be about $9 billion, lower than $10.4 billion in 2016. This is due to higher investments in electrification, autonomy and mobility.
The 2017 margin in North America is expected to be below the 2016 level. Further, Ford expects the loss in South America to improve as the economy recovers. In Europe, the company anticipates lower profits than 2016. In the Middle East and Africa unit, it expects to record better performance. In the Asia-Pacific, Ford estimates pre-tax profit to be higher than the 2016 level.
Moreover, the automaker projects Ford Credit’s profits in 2017 to be about $1.5 billion, lower than the 2016 level of $1.9 billion.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two downward revisions for the current quarter.
At this time, Ford's stock has an average Growth Score of 'C', however its Momentum is doing a lot better with an 'A'. Following the exact same course, the stock was allocated also 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 equally suitable for value and momentum investors while growth investors may want to look elsewhere.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Ford (F) Down 4.7% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Ford Motor Company (F - Free Report) . Shares have lost about 4.7% 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 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 drivers.
Ford Earnings & Revenues Beat in Q1, Guidance Still Soft
Ford posted adjusted earnings per share of $0.39 in the first quarter of 2017. The reported figure was $0.29 lower than that in first-quarter 2016 (excluding special items). However, earnings surpassed the Zacks Consensus Estimate of $0.34 per share. Pre-tax income (excluding special items) was $2.2 billion, about $1.6 billion lower than the year-ago quarter figure.
Net profit attributable to Ford was $1.6 billion, down $0.9 billion from the year-ago quarter figure.
Ford recorded revenues of $36.48 billion, surpassing the Zacks Consensus Estimate of $34.78 billion. Revenues were $1.3 billion higher than a year ago.
Ford Automotive
Ford recorded Automotive revenues of $36.48 billion. Revenues increased $1.3 billion on a year-over-year basis. Wholesale volumes decreased 17,000 units to stand at 1.7 million. Pre-tax profit declined to $2 billion from $3.5 billion a year ago.
In North America, revenues inched up 0.4% to $24 billion. Wholesale volumes declined 5.3% year over year to 771,000 units due to lower dealer-stock build. Further, pre-tax profit decreased to $2 billion from $3.1 billion due to commodity headwinds and higher investments, partly offset by net efficiencies across all other remaining cost categories.
In South America, revenues increased 21.4% to $1.1 billion. Wholesale volumes rose 11.1% to 70,000 units. Pre-tax loss amounted to $244 million, narrower than $256 million in the prior-year quarter. The loss was due to an improving but still weak economy.
In Europe, revenues rose 10.1% to $7.6 billion. Wholesale volumes increased 12.5% year over year to 449,000 units. The region recorded a pre-tax profit of $176 million, compared with $434 million a year ago. The downside was driven by currency headwinds as well as higher costs and investments.
In the Middle East & Africa segment, revenues declined 33.3% year over year to $0.6 billion. Wholesale volumes plunged 34.8% to 30,000 units. The region reported a pre-tax loss of $80 million, far wider than $14 million in the year-ago quarter.
In the Asia-Pacific region, revenues of $3.2 billion improved 18.5% year over year. Wholesale volumes declined 3.8% to 383,000 units. Market share in the region was 3.4%, compared with the year-ago level of 3.8%. The Asia-Pacific region reported a pre-tax profit of $124 million, down from $220 million in the year-ago quarter.
Financial Services
Ford Credit reported a 6.4% decline in pre-tax profit to $481 million in the first quarter of 2017, as expected.
Financial Position
Ford had cash and cash equivalents of $17.8 billion as of Mar 31, 2017, up from $15.9 billion as of Dec 31, 2016. As of Mar 31, 2017, Automotive debt increased to $16.2 billion from $15.9 billion as of Dec 31, 2016.
In first-quarter 2017, the company’s cash flow from continuing operations decreased to $4.1 billion from $4.3 billion a year ago. Capital expenditures declined to $1.5 billion from $1.7 billion in first-quarter 2016.
2017 Guidance
Ford expects 2017 pre-tax profit to be about $9 billion, lower than $10.4 billion in 2016. This is due to higher investments in electrification, autonomy and mobility.
The 2017 margin in North America is expected to be below the 2016 level. Further, Ford expects the loss in South America to improve as the economy recovers. In Europe, the company anticipates lower profits than 2016. In the Middle East and Africa unit, it expects to record better performance. In the Asia-Pacific, Ford estimates pre-tax profit to be higher than the 2016 level.
Moreover, the automaker projects Ford Credit’s profits in 2017 to be about $1.5 billion, lower than the 2016 level of $1.9 billion.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two downward revisions for the current quarter.
Ford Motor Company Price and Consensus
Ford Motor Company Price and Consensus | Ford Motor Company Quote
VGM Scores
At this time, Ford's stock has an average Growth Score of 'C', however its Momentum is doing a lot better with an 'A'. Following the exact same course, the stock was allocated also 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 equally suitable for value and momentum investors while growth investors may want to look elsewhere.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.