Ford Motor Company (F - Free Report) reported third-quarter 2020 adjusted diluted earnings of 65 cents per share, comfortably outpacing the Zacks Consensus Estimate of 22 cents.
This outperformance resulted from higher-than-anticipated automotive sales in North America and Europe. Revenues from automotive sales in North America and Europe came in at $25,300 million and $5,700 million, respectively, beating the Zacks Consensus Estimate of $24,307 million and $5,562 million. Moreover, the bottom line surged 91.2% year on year from the year-ago quarter’s profit of 34 cents per share.
The Dearborn-based automaker delivered solid financial results in the third quarter through a combination of robust operating execution and focus on its strengths in high-demand, profitable vehicles, along with a reversal of the adverse impact of the coronavirus pandemic.
During the September-end quarter, the company reported adjusted EBIT of $3,644 million, as against the $1,793 million recorded in the corresponding period of 2019. Also, the U.S. auto giant reported net profit of $2,385 million, significantly increasing from the prior-year level of $425 million.
Ford registered revenues of $37,501 million in the third quarter, up from the year-ago period’s $36,990 million.
During the reported quarter, the company generated automotive revenues of $34,707 million. The figure outpaced the Zacks Consensus Estimate of $32,700 million as well as came in higher than the prior-year quarter’s $33,931 million.
Segmental Performance
For the third quarter, revenues from Ford Credit declined 8.9% year over year to $2,774 million. Revenues from Ford Mobility came in at $20 million, up from the $14 million recorded in the third quarter of 2019.
During the July-September quarter, wholesale volume in the Ford Automotive segment slid 5% from the prior-year period to 1,178,000. The segment recorded EBIT of $2,644 million, higher than the year-ago profit of $1,329 million.
In North America, revenues increased 8% year on year to $25.3 billion during the reported quarter. Wholesale volume rose 2% from the year-earlier quarter to 651,000 units. Further, EBIT was $3,178 million compared with the EBIT of $2,011 million witnessed in the year-ago quarter.
In South America, revenues plunged 39% year over year to $0.6 billion during the third quarter. Wholesale volume plummeted 39% from the year-ago quarter to 48,000 units. The region reported a negative EBIT of $108 million, narrower than the prior-year loss of $165 million.
In Europe, revenues fell 10% year on year to $5.7 billion during the September-end quarter. Wholesale volume slipped 20% from the year-ago period to 239,000 units. The region registered a negative EBIT of $440 million, wider than the prior-year loss of $143 million.
In China, revenues climbed 15% year over year to $1 billion during the reported quarter. Further, wholesale volume increased 22% from the prior-year figure to 164,000 units. The region reported a negative EBIT of $58 million, narrower than the year-ago loss of $281 million.
In the International Markets Group, revenues dropped 11% from the year-ago figure to $2 billion. Wholesale volume dipped 18% from the prior-year level to 76,000 units. However, the region reported EBIT of $72 million comparing favorably with the loss of $93 million witnessed in the prior-year quarter.
Financial Position
The company reported third-quarter adjusted free cash flow of $6,302 million. Ford had cash and cash equivalents of $24,263 million as of Sep 30, 2020, compared with $17,504 million on Dec 31, 2019. Automotive long-term debt increased to $22,363 million as of Sep 30, 2020 compared with $13,233 million on Dec 31, 2019.
Outlook
Ford has issued the fourth-quarter guidance. The company plans to launch three anticipated, all-new game-changing vehicles in the ongoing quarter. The models slated to be rolled out are 2021 F-150, all electric Mustang Mach-E, and Bronco Sport — first of new Bronco family of products. For this, the company will temporarily lower wholesale shipments of F-150 to about 100,000 units. Also, it expects to incur sequentially higher structural and other costs related to the manufacturing launches of Mustang Mach-E and Bronco Sport. Ford also expects to generate sequentially lower EBT from Ford Credit.
Ford anticipates fourth-quarter adjusted EBIT to be between break-even and a $500-million loss, down from both the third quarter and the year-ago period. Based on this guidance, the company now expects a positive adjusted company EBIT for full-year 2020.
Zacks Rank & Other Stocks to Consider
Ford currently flaunts a Zacks Rank #1 (Strong Buy). Shares of the company have depreciated 17.2%, year to date, underperforming the industry’s rise of 139%.
Some other top-ranked stocks in the auto sector are Lear Corporation (LEA - Free Report) , Autoliv Inc (ALV - Free Report) and LCI Industries (LCII - Free Report) all of which sport a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Ford Motor Company (F - Free Report) reported third-quarter 2020 adjusted diluted earnings of 65 cents per share, comfortably outpacing the Zacks Consensus Estimate of 22 cents.
This outperformance resulted from higher-than-anticipated automotive sales in North America and Europe. Revenues from automotive sales in North America and Europe came in at $25,300 million and $5,700 million, respectively, beating the Zacks Consensus Estimate of $24,307 million and $5,562 million. Moreover, the bottom line surged 91.2% year on year from the year-ago quarter’s profit of 34 cents per share.
The Dearborn-based automaker delivered solid financial results in the third quarter through a combination of robust operating execution and focus on its strengths in high-demand, profitable vehicles, along with a reversal of the adverse impact of the coronavirus pandemic.
During the September-end quarter, the company reported adjusted EBIT of $3,644 million, as against the $1,793 million recorded in the corresponding period of 2019. Also, the U.S. auto giant reported net profit of $2,385 million, significantly increasing from the prior-year level of $425 million.
Ford registered revenues of $37,501 million in the third quarter, up from the year-ago period’s $36,990 million.
During the reported quarter, the company generated automotive revenues of $34,707 million. The figure outpaced the Zacks Consensus Estimate of $32,700 million as well as came in higher than the prior-year quarter’s $33,931 million.
Segmental Performance
For the third quarter, revenues from Ford Credit declined 8.9% year over year to $2,774 million. Revenues from Ford Mobility came in at $20 million, up from the $14 million recorded in the third quarter of 2019.
During the July-September quarter, wholesale volume in the Ford Automotive segment slid 5% from the prior-year period to 1,178,000. The segment recorded EBIT of $2,644 million, higher than the year-ago profit of $1,329 million.
In North America, revenues increased 8% year on year to $25.3 billion during the reported quarter. Wholesale volume rose 2% from the year-earlier quarter to 651,000 units. Further, EBIT was $3,178 million compared with the EBIT of $2,011 million witnessed in the year-ago quarter.
In South America, revenues plunged 39% year over year to $0.6 billion during the third quarter. Wholesale volume plummeted 39% from the year-ago quarter to 48,000 units. The region reported a negative EBIT of $108 million, narrower than the prior-year loss of $165 million.
In Europe, revenues fell 10% year on year to $5.7 billion during the September-end quarter. Wholesale volume slipped 20% from the year-ago period to 239,000 units. The region registered a negative EBIT of $440 million, wider than the prior-year loss of $143 million.
In China, revenues climbed 15% year over year to $1 billion during the reported quarter. Further, wholesale volume increased 22% from the prior-year figure to 164,000 units. The region reported a negative EBIT of $58 million, narrower than the year-ago loss of $281 million.
In the International Markets Group, revenues dropped 11% from the year-ago figure to $2 billion. Wholesale volume dipped 18% from the prior-year level to 76,000 units. However, the region reported EBIT of $72 million comparing favorably with the loss of $93 million witnessed in the prior-year quarter.
Financial Position
The company reported third-quarter adjusted free cash flow of $6,302 million. Ford had cash and cash equivalents of $24,263 million as of Sep 30, 2020, compared with $17,504 million on Dec 31, 2019. Automotive long-term debt increased to $22,363 million as of Sep 30, 2020 compared with $13,233 million on Dec 31, 2019.
Outlook
Ford has issued the fourth-quarter guidance. The company plans to launch three anticipated, all-new game-changing vehicles in the ongoing quarter. The models slated to be rolled out are 2021 F-150, all electric Mustang Mach-E, and Bronco Sport — first of new Bronco family of products. For this, the company will temporarily lower wholesale shipments of F-150 to about 100,000 units. Also, it expects to incur sequentially higher structural and other costs related to the manufacturing launches of Mustang Mach-E and Bronco Sport. Ford also expects to generate sequentially lower EBT from Ford Credit.
Ford anticipates fourth-quarter adjusted EBIT to be between break-even and a $500-million loss, down from both the third quarter and the year-ago period. Based on this guidance, the company now expects a positive adjusted company EBIT for full-year 2020.
Zacks Rank & Other Stocks to Consider
Ford currently flaunts a Zacks Rank #1 (Strong Buy). Shares of the company have depreciated 17.2%, year to date, underperforming the industry’s rise of 139%.
Some other top-ranked stocks in the auto sector are Lear Corporation (LEA - Free Report) , Autoliv Inc (ALV - Free Report) and LCI Industries (LCII - Free Report) all of which sport a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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