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Ford (F) Q3 Earnings In Line With Estimates, Decrease Y/Y
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Ford Motor Company (F - Free Report) reported third-quarter 2018 adjusted earnings per share of 29 cents, which is in line with the Zacks Consensus Estimate. In the prior-year quarter, adjusted earnings were 44 cents per share. Results were impacted by challenges faced by the company in China market and high commodity costs.
Adjusted EBIT in the third quarter was $1.67 billion, reflecting a decrease from $2.3 billion recorded in the year-ago quarter.
During the reported quarter, Ford logged automotive revenues of $34.7 billion, up from the prior-year quarter figure of $33.6 billion. The Zacks Consensus Estimate for revenues was $32.1 billion.
Ford Motor Company Price, Consensus and EPS Surprise
During the reported quarter, wholesale volume at the Ford Automotive segment declined by 151,000 units to 1.35 million. Earnings before income and taxes (EBIT) were $1.4 billion, a decline of $500 million from the year-ago quarter.
In North America, revenues decreased by $1.4 billion year over year to $22.3 billion during the reported quarter. Wholesale volumes declined by 6,000 units to 644,000. Further, EBIT was $2 billion, marking an increase of $100 million from the year-ago quarter. The rise is majorly due to higher sales of Ford trucks and sports utility vehicles (SUVs).
In South America, revenues slumped by $200 million year over year to $1.3 billion. Pre-tax loss amounted to $152 million, majorly due to higher commodity costs and weaker currencies. Moreover, wholesale volumes declined by 9,000 units to 94,000.
In Europe, revenues increased by $500 million to $7.4 billion. Wholesale volumes rose 14,000 units to around 356,000. However, the region incurred Pre-tax loss of $245 million, owing to weakness in countries — including Turkey and Russia — along with high costs related to the launch of ‘Focus’.
In the Middle East & Africa segment, revenues declined by $41 million year over year to $600 million due to lower volume. Further, wholesale volume declined by 5,000 units to 27,000. The region recorded EBIT of $47 million.
In the Asia-Pacific region, revenues decreased by $600 million to $3.1 billion. Wholesale volumes declined by 145,000 units to 234,000. Further, the region incurred pre-tax loss of $208 million.
Other Segments
Ford has two other segments namely Ford Credit and Mobility. During the third quarter, Ford Credit generated EBT of $678 million. The Mobility segment had Pre-tax loss of $196 million due to increased investment in the development of the autonomous vehicle business.
Financial Position
Ford had cash and cash equivalents of $18.6 billion as of Sep 30, 2018, compared with $18.5 billion as of Dec 31, 2017.
2018 Guidance
For 2018, the company reaffirmed its expected adjusted EPS of $1.30-$1.50. However, higher costs, along with worsening Europe and China business, will impede Ford’s target to achieve EBIT margin of 8% by 2020.
CarMax has an expected long-term growth rate of 3.3%. Over the past six months, shares of the company have moved up 9.7%.
Allison Transmission has an expected long-term growth rate of 10%. Over the past three months, shares of the company have moved up 4.7%.
Advance Auto has an expected long-term growth rate of 12.3%. Shares of the company have risen 12.3% over the past three months.
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Ford (F) Q3 Earnings In Line With Estimates, Decrease Y/Y
Ford Motor Company (F - Free Report) reported third-quarter 2018 adjusted earnings per share of 29 cents, which is in line with the Zacks Consensus Estimate. In the prior-year quarter, adjusted earnings were 44 cents per share. Results were impacted by challenges faced by the company in China market and high commodity costs.
Adjusted EBIT in the third quarter was $1.67 billion, reflecting a decrease from $2.3 billion recorded in the year-ago quarter.
During the reported quarter, Ford logged automotive revenues of $34.7 billion, up from the prior-year quarter figure of $33.6 billion. The Zacks Consensus Estimate for revenues was $32.1 billion.
Ford Motor Company Price, Consensus and EPS Surprise
Ford Motor Company Price, Consensus and EPS Surprise | Ford Motor Company Quote
Ford Automotive
During the reported quarter, wholesale volume at the Ford Automotive segment declined by 151,000 units to 1.35 million. Earnings before income and taxes (EBIT) were $1.4 billion, a decline of $500 million from the year-ago quarter.
In North America, revenues decreased by $1.4 billion year over year to $22.3 billion during the reported quarter. Wholesale volumes declined by 6,000 units to 644,000. Further, EBIT was $2 billion, marking an increase of $100 million from the year-ago quarter. The rise is majorly due to higher sales of Ford trucks and sports utility vehicles (SUVs).
In South America, revenues slumped by $200 million year over year to $1.3 billion. Pre-tax loss amounted to $152 million, majorly due to higher commodity costs and weaker currencies. Moreover, wholesale volumes declined by 9,000 units to 94,000.
In Europe, revenues increased by $500 million to $7.4 billion. Wholesale volumes rose 14,000 units to around 356,000. However, the region incurred Pre-tax loss of $245 million, owing to weakness in countries — including Turkey and Russia — along with high costs related to the launch of ‘Focus’.
In the Middle East & Africa segment, revenues declined by $41 million year over year to $600 million due to lower volume. Further, wholesale volume declined by 5,000 units to 27,000. The region recorded EBIT of $47 million.
In the Asia-Pacific region, revenues decreased by $600 million to $3.1 billion. Wholesale volumes declined by 145,000 units to 234,000. Further, the region incurred pre-tax loss of $208 million.
Other Segments
Ford has two other segments namely Ford Credit and Mobility. During the third quarter, Ford Credit generated EBT of $678 million. The Mobility segment had Pre-tax loss of $196 million due to increased investment in the development of the autonomous vehicle business.
Financial Position
Ford had cash and cash equivalents of $18.6 billion as of Sep 30, 2018, compared with $18.5 billion as of Dec 31, 2017.
2018 Guidance
For 2018, the company reaffirmed its expected adjusted EPS of $1.30-$1.50. However, higher costs, along with worsening Europe and China business, will impede Ford’s target to achieve EBIT margin of 8% by 2020.
Zacks Rank and Stocks to Consider
Ford currently carries a Zacks Rank #5 (Strong Sell). A few better-ranked stocks in the auto space are CarMax, Inc. (KMX - Free Report) , Allison Transmission Holdings, Inc. (ALSN - Free Report) and Advance Auto Parts, Inc. (AAP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CarMax has an expected long-term growth rate of 3.3%. Over the past six months, shares of the company have moved up 9.7%.
Allison Transmission has an expected long-term growth rate of 10%. Over the past three months, shares of the company have moved up 4.7%.
Advance Auto has an expected long-term growth rate of 12.3%. Shares of the company have risen 12.3% over the past three months.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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