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Will Ford (F) North America Unit See High Costs in Q3 Earnings?
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Ford’s (F - Free Report) North America market — which accounts for the bulk of automotive sales — is likely to have aided third-quarter 2022 revenues. However, commodity cost inflation is likely to have played spoilsport, thereby denting margins. The U.S. auto giant is set to release quarterly results on Oct 26, after the closing bell.
Q2 Highlights of Ford’s North America Market
In the last reported quarter, wholesale unit volumes in the North American segment jumped 89% from the year-earlier period to 618,000 units. Revenues in the North American segment surged 94% year on year to $29.1 billion. Consequently, EBIT totaled $3,269 million, a massive increase from $194 million in the corresponding quarter of 2021.
Factors at Play This Time Around
Ford’s third-quarter vehicle sales in the United States rose 16% year over year to 464,674 units, driven by higher sales of trucks and SUVs. Sales of SUVs totaled 215,322 units in the quarter to be reported, up 33.3% year over year. The increase was primarily led by the massive demand for Bronc, Mustang Mach E, Escape and Explorer models. Sales of trucks totaled 238,981 units in the quarter under discussion, up from 229,738 units in the third quarter of 2021. Strong demand for F-150 Lightning and Maverick aided growth in truck sales. Ford’s EV sales — comprising Mustang Mach E, E-Transit and F-150 Lightning — rose to 18,257 units in the third quarter of 2022. In fact, Ford’s green vehicles sales in the United States were only second to EV titan Tesla.
Amid strong demand and rising sticker prices of vehicles, Ford’s revenues from the North America segment are likely to have got a boost. The Zacks Consensus Estimate for wholesale volumes in North America is pegged at 604,000 units, implying an increase from 546,000 units in the year-ago period. Consequently, the consensus mark for revenues from North America is $26.6 million, implying a year-over-year uptick of 10.6%. We project revenues from the segment to come around $25.3 billion, suggesting growth of 5.2% from the year-ago period.
While Ford’s projected revenues from the North America segment spark optimism, profits from the segment are likely to take a hit in view of commodity cost headwinds stemming from exacerbated supply chain snarls and inflationary pressure. In fact, Ford issued a profit warning last month as it anticipates the cost of auto parts to be $1 billion higher than expected in the third quarter of 2022. As such, the consensus mark for EBIT from the North America segment is pegged at $1,849 million, indicating a fall from $2,423 million.
Ford’s Overall Earnings & Revenue Projections for Q3
The Zacks Consensus Estimate for Ford’s third-quarter earnings and revenues is pegged at 29 cents a share and $37.3 billion, respectively.
Investors should note that our proven model conclusively predicts 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. Ford currently has an Earnings ESP of +2.74% and carries a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are a couple of other stocks in the auto sector lined up to release quarterly results soon, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported.
Oshkosh (OSK - Free Report) will release third-quarter 2022 results on Oct 27. The company has an Earnings ESP of +3.36% and a Zacks Rank #3.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at $1.15 per share and $2.14 billion, respectively. OSK surpassed earnings estimates in two of the trailing four quarters for as many misses, with the average surprise being a negative 13.62%.
Lear (LEA - Free Report) will release third-quarter 2022 results on Nov 1. The company has an Earnings ESP of +4.02% and a Zacks Rank #3.
The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $2.12 per share and $5.16 billion, respectively. LEA surpassed earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 14.41%.
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Will Ford (F) North America Unit See High Costs in Q3 Earnings?
Ford’s (F - Free Report) North America market — which accounts for the bulk of automotive sales — is likely to have aided third-quarter 2022 revenues. However, commodity cost inflation is likely to have played spoilsport, thereby denting margins. The U.S. auto giant is set to release quarterly results on Oct 26, after the closing bell.
Q2 Highlights of Ford’s North America Market
In the last reported quarter, wholesale unit volumes in the North American segment jumped 89% from the year-earlier period to 618,000 units. Revenues in the North American segment surged 94% year on year to $29.1 billion. Consequently, EBIT totaled $3,269 million, a massive increase from $194 million in the corresponding quarter of 2021.
Factors at Play This Time Around
Ford’s third-quarter vehicle sales in the United States rose 16% year over year to 464,674 units, driven by higher sales of trucks and SUVs. Sales of SUVs totaled 215,322 units in the quarter to be reported, up 33.3% year over year. The increase was primarily led by the massive demand for Bronc, Mustang Mach E, Escape and Explorer models. Sales of trucks totaled 238,981 units in the quarter under discussion, up from 229,738 units in the third quarter of 2021. Strong demand for F-150 Lightning and Maverick aided growth in truck sales. Ford’s EV sales — comprising Mustang Mach E, E-Transit and F-150 Lightning — rose to 18,257 units in the third quarter of 2022. In fact, Ford’s green vehicles sales in the United States were only second to EV titan Tesla.
Amid strong demand and rising sticker prices of vehicles, Ford’s revenues from the North America segment are likely to have got a boost. The Zacks Consensus Estimate for wholesale volumes in North America is pegged at 604,000 units, implying an increase from 546,000 units in the year-ago period. Consequently, the consensus mark for revenues from North America is $26.6 million, implying a year-over-year uptick of 10.6%. We project revenues from the segment to come around $25.3 billion, suggesting growth of 5.2% from the year-ago period.
While Ford’s projected revenues from the North America segment spark optimism, profits from the segment are likely to take a hit in view of commodity cost headwinds stemming from exacerbated supply chain snarls and inflationary pressure. In fact, Ford issued a profit warning last month as it anticipates the cost of auto parts to be $1 billion higher than expected in the third quarter of 2022. As such, the consensus mark for EBIT from the North America segment is pegged at $1,849 million, indicating a fall from $2,423 million.
Ford’s Overall Earnings & Revenue Projections for Q3
The Zacks Consensus Estimate for Ford’s third-quarter earnings and revenues is pegged at 29 cents a share and $37.3 billion, respectively.
Investors should note that our proven model conclusively predicts 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. Ford currently has an Earnings ESP of +2.74% and carries a Zacks Rank #3.
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.
Other Stocks With the Favorable Combination
Here are a couple of other stocks in the auto sector lined up to release quarterly results soon, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported.
Oshkosh (OSK - Free Report) will release third-quarter 2022 results on Oct 27. The company has an Earnings ESP of +3.36% and a Zacks Rank #3.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at $1.15 per share and $2.14 billion, respectively. OSK surpassed earnings estimates in two of the trailing four quarters for as many misses, with the average surprise being a negative 13.62%.
Lear (LEA - Free Report) will release third-quarter 2022 results on Nov 1. The company has an Earnings ESP of +4.02% and a Zacks Rank #3.
The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $2.12 per share and $5.16 billion, respectively. LEA surpassed earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 14.41%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.