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Is Ford (F) Poised to Keep Earnings Beat Streak Alive in Q4?

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Ford (F - Free Report) is slated to release fourth-quarter 2021 results on Feb 3, after the closing bell. The Zacks Consensus Estimate for the quarter’s revenues and earnings is pegged at $35.02 billion and 43 cents a share, respectively.

The U.S. auto biggie delivered better-than-expected earnings in the last reported quarter on higher-than-anticipated revenues, primarily in North America and South America markets.

The company surpassed estimates in the trailing four quarters, with the average being 335.6%. This is depicted in the graph below:

Ford Motor Company Price and EPS Surprise

Ford Motor Company Price and EPS Surprise

Ford Motor Company price-eps-surprise | Ford Motor Company Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for Ford’s fourth-quarter earnings per share has moved up by 4 cents in the past seven days. In the year-ago quarter, it posted earnings of 34 cents per share. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 5.4%.

Earnings Whispers

Our proven model predicts does not conclusively predict an earnings beat for Ford for the to-be-reported quarter, as it does not have the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Ford has an Earnings ESP of 0.00%. 

Zacks Rank: It currently carries a Zacks Rank of 3.

Factors Shaping Ford’s Q4 Results

Ford’s fourth-quarter 2021 results are set to reflect higher sequential revenues, thanks to increasing vehicle deliveries despite chip crunch woes. Also, the rising average prices of vehicles are likely to have buoyed the firm’s revenues. The Zacks Consensus Estimate for total wholesale volumes for the quarter under discussion is pegged at 1,113,000 units, indicating an increase from 1,012,000 units in third-quarter 2021. The consensus mark for total automotive revenues is $35.9 billion, suggesting growth from $33.2 billion generated in the prior quarter.

Below we highlight how Ford is expected to have performed across its major markets.

Ford emerged as the best-selling automaker in the United States in fourth-quarter 2021, retailing 508,451 vehicles in the quarter, marking a 26.8% sequential increase. The Zacks Consensus Estimate for wholesale volumes in North America is pegged at 576,000 units, implying an uptick from 546,000 and 540,000 vehicles in third-quarter 2021 and fourth-quarter 2020, respectively. Consequently, the consensus mark for revenues in North America is $26.1 billion, pointing to an improvement from $24 billion and $22 billion in the third quarter and the year-ago period, respectively.

In China, Ford sold 167,000 units, marking a sequential increase of 12%. Ford brand passenger vehicle sales of more than 72,000 units reflected an 18.1% increase from third-quarter 2021. Ford commenced local production of Mustang Mach-E in October, with first customers taking delivery in December.

The Zacks Consensus Estimate for fourth-quarter wholesale volumes in Europe is 252,000, which indicates sequential growth of 15.6%. The consensus mark for revenues is pegged at $6.7 billion, which suggests growth from $6.1 billion generated in third-quarter 2021. Thanks to aggressive restructuring efforts in the region, the company is expected to generate a pretax profit of $86 million, which implies a turnaround from a pretax loss of $52 million incurred in the prior quarter.

The consensus estimate for fourth-quarter wholesale volumes in South America is pegged at 29,560 units, which points to an increase from the prior quarter’s 20,000 vehicles. The Zacks Consensus Estimate for revenues is $726 million, implying an uptick of 21% quarter over quarter.

The consensus mark for fourth-quarter revenues from the Ford Credit unit is pegged at $2,708 million, indicating a rise from $2,434 million registered in third-quarter 2021.

Meanwhile, investors should note that Ford recently listed several large special items that it intends to report as part of the company’s fourth-quarter and full-year 2021 financial results. The legacy automaker expects to report a fourth-quarter gain of $8.2 billion on its equity investment in Rivian. It also expects a non-cash, pre-tax accounting re-measurement gain of $3.5 billion for fourth-quarter 2021. Ford anticipates recording $1.7 billion in costs associated with Ford repurchasing and redeeming more than $7.6 billion in high-cost debt in the fourth quarter of 2021. Also, the company plans to report a $3.6-billion tax special item, a non-cash benefit, primarily resulting from the changes in Ford’s global tax structure and its effect on deferred tax assets.

Stocks to Consider

Here are some firms in the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:

Cummins (CMI - Free Report) has an Earnings ESP of +1.26% and a Zacks Rank #3. The stock is set to report fourth-quarter 2021 earnings on Feb 3.

The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $3.07 per share and $5.80 billion, respectively. In the trailing four quarters, CMI surpassed earnings estimates on three occasions and missed on the other, with the average surprise being 8%

BorgWarner (BWA - Free Report) has an Earnings ESP of +3.92% and a Zacks Rank #3. The stock is set to report fourth-quarter 2021 earnings on Feb 15.

The Zacks Consensus Estimate for BorgWarner’s to-be-reported quarter’s earnings and revenues is pegged at 72 cents per share and $3.38 billion, respectively. BWA surpassed earnings estimates in the trailing four quarters, with the average being 30.9%

Genuine Parts (GPC - Free Report) has an Earnings ESP of +0.31% and a Zacks Rank #2. The stock is set to report fourth-quarter 2021 earnings on Feb 17.

The Zacks Consensus Estimate for Genuine Parts’ to-be-reported quarter’s earnings and revenues is pegged at $1.60 per share and $4.66 billion, respectively. GPC surpassed earnings estimates in the trailing four quarters, with the average being 16%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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