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Will North America Market Bolster Ford's (F) Q4 Earnings?
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Ford’s (F - Free Report) North America market — which accounts for the bulk of total automotive revenues — is likely to have fueled fourth-quarter earnings. The U.S. auto giant is set to release quarterly results on Feb 3, before market open.
In the last reported quarter, wholesale unit volumes in the North American segment declined 16% from the year-earlier quarter to 546,000 units. Revenues in the North American segment also dropped 5% year on year to $24 billion. Consequently, EBIT totaled $2,423 million, lower than the $3,202 million recorded in the corresponding quarter of 2020. The global chip deficit, high commodity prices, a tight labor market and logistical challenges impaired the results.
Solid Vehicle Sales to Drive North America Market in Q4
Selling 508,451 vehicles, Ford emerged as the best-selling automaker in the United States in fourth-quarter 2021, marking a 26.8% sequential increase versus the overall industry’s decline of roughly 3%.
While sales of the namesake brand came in at 487,484 units in the fourth-quarter 2021, up from 383,805 vehicles in third-quarter 2021, the same from the Lincoln brand increased to 20,967 units from 17,038 units in the last reported quarter.
In addition, total truck sales for the quarter came in at 268,379 units, up from 229,738 units recorded in third-quarter 2021. Sales of America’s best-selling truck, Ford F-Series, totaled 191,173 units, up from 172,799 vehicles in the last reported quarter.
Sales for SUVs totaled 228,499 units, marking an uptick from 161,571 units sold during the third quarter. Ford witnessed sequential growth in sales of all major SUV brands including Escape, Edge, Expedition, Bronco and Bronco Sport. Sales of Mustang Mach-E — Ford’s popular electric offering — totaled 8,285, rising 40% sequentially.
The demand for passenger cars also rose to 11,573 units for the three months ended Dec 31 from 9,534 units in the third quarter, majorly due to higher sales of the Mustang model.
The Zacks Consensus Estimate for wholesale volumes in North America is pegged at 576,000 units, implying an uptick from 546,000 in third-quarter 2021. Consequently, the consensus mark for revenues in North America is $25.7 billion, pointing to an improvement from $24 billion recorded in the third quarter.
We believe the projected sequential revenue and deliveries growth in the North America market is likely to aid Ford’s fourth-quarter results.
Ford’s Overall Earnings & Revenue Projections for Q3
The Zacks Consensus Estimate for Ford’s fourth-quarter earnings and revenues is pegged at 43 cents a share and $35.02 billion, respectively.
Investors should note that our proven model does not conclusively predict an earnings beat for Ford this season. The 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. That is not the case here. Ford currently carries a Zacks Rank #2 and has an Earnings ESP of 0.00%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are a few stocks in the auto sector that are worth considering, as these have the right combination of elements to come up with an earnings beat this time around:
O'Reilly Automotive (ORLY - Free Report) has an Earnings ESP of +1.72% and a Zacks Rank #3. The stock is set to report fourth-quarter 2021 earnings on Feb 9.
The Zacks Consensus Estimate for O’Reilly’s to-be-reported quarter’s earnings and revenues is pegged at $5.96 per share and $3.07 billion, respectively. ORLY surpassed earnings estimates in the trailing four quarters, with the average being 16.8%.
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 74 cents per share and $3.46 billion, respectively. BWA surpassed earnings estimates in the trailing four quarters, with the average being 30.9%
Allison Transmission Holdings (ALSN - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #3. The company is set to announce quarterly figures on Feb 16.
The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at 92 cents per share and $598 million, respectively. ALSN surpassed earnings estimates in three of the preceding four quarters and missed on the other, delivering an average surprise of 3.9%.
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Will North America Market Bolster Ford's (F) Q4 Earnings?
Ford’s (F - Free Report) North America market — which accounts for the bulk of total automotive revenues — is likely to have fueled fourth-quarter earnings. The U.S. auto giant is set to release quarterly results on Feb 3, before market open.
(Also read: Is Ford Poised to Keep Earnings Beat Streak Alive in Q4?)
Q3 Highlights of Ford’s North America Market
In the last reported quarter, wholesale unit volumes in the North American segment declined 16% from the year-earlier quarter to 546,000 units. Revenues in the North American segment also dropped 5% year on year to $24 billion. Consequently, EBIT totaled $2,423 million, lower than the $3,202 million recorded in the corresponding quarter of 2020. The global chip deficit, high commodity prices, a tight labor market and logistical challenges impaired the results.
Solid Vehicle Sales to Drive North America Market in Q4
Selling 508,451 vehicles, Ford emerged as the best-selling automaker in the United States in fourth-quarter 2021, marking a 26.8% sequential increase versus the overall industry’s decline of roughly 3%.
While sales of the namesake brand came in at 487,484 units in the fourth-quarter 2021, up from 383,805 vehicles in third-quarter 2021, the same from the Lincoln brand increased to 20,967 units from 17,038 units in the last reported quarter.
In addition, total truck sales for the quarter came in at 268,379 units, up from 229,738 units recorded in third-quarter 2021. Sales of America’s best-selling truck, Ford F-Series, totaled 191,173 units, up from 172,799 vehicles in the last reported quarter.
Sales for SUVs totaled 228,499 units, marking an uptick from 161,571 units sold during the third quarter. Ford witnessed sequential growth in sales of all major SUV brands including Escape, Edge, Expedition, Bronco and Bronco Sport. Sales of Mustang Mach-E — Ford’s popular electric offering — totaled 8,285, rising 40% sequentially.
The demand for passenger cars also rose to 11,573 units for the three months ended Dec 31 from 9,534 units in the third quarter, majorly due to higher sales of the Mustang model.
The Zacks Consensus Estimate for wholesale volumes in North America is pegged at 576,000 units, implying an uptick from 546,000 in third-quarter 2021. Consequently, the consensus mark for revenues in North America is $25.7 billion, pointing to an improvement from $24 billion recorded in the third quarter.
We believe the projected sequential revenue and deliveries growth in the North America market is likely to aid Ford’s fourth-quarter results.
Ford’s Overall Earnings & Revenue Projections for Q3
The Zacks Consensus Estimate for Ford’s fourth-quarter earnings and revenues is pegged at 43 cents a share and $35.02 billion, respectively.
Investors should note that our proven model does not conclusively predict an earnings beat for Ford this season. The 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. That is not the case here. Ford currently carries a Zacks Rank #2 and has an Earnings ESP of 0.00%.
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.
Stocks With Favorable Combination
Here are a few stocks in the auto sector that are worth considering, as these have the right combination of elements to come up with an earnings beat this time around:
O'Reilly Automotive (ORLY - Free Report) has an Earnings ESP of +1.72% and a Zacks Rank #3. The stock is set to report fourth-quarter 2021 earnings on Feb 9.
The Zacks Consensus Estimate for O’Reilly’s to-be-reported quarter’s earnings and revenues is pegged at $5.96 per share and $3.07 billion, respectively. ORLY surpassed earnings estimates in the trailing four quarters, with the average being 16.8%.
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 74 cents per share and $3.46 billion, respectively. BWA surpassed earnings estimates in the trailing four quarters, with the average being 30.9%
Allison Transmission Holdings (ALSN - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #3. The company is set to announce quarterly figures on Feb 16.
The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at 92 cents per share and $598 million, respectively. ALSN surpassed earnings estimates in three of the preceding four quarters and missed on the other, delivering an average surprise of 3.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.