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Ford Motor Co. (F - Free Report) posted adjusted earnings per share of 26 cents in the third quarter of 2016 that was 26 cents lower than the figure recorded in third-quarter 2015 (excluding special items). However, earnings per share comfortably surpassed the Zacks Consensus Estimate of 21 cents. Pre-tax income (excluding special items) was $1.4 billion, $1.7 billion lower than the year-ago quarter figure.
Net income attributable to Ford was $957 million, compared to $2.19 billion recorded in the year-ago quarter.
Revenues in the reported quarter fell $2.2 billion to $35.9 billion.
Ford Automotive logged revenues of $33.3 billion, surpassing the Zacks Consensus Estimate of $32.02 billion. Revenues were $2.5 billion lower year over year. Wholesale volumes decreased 66,000 units to 1.53 million units. Pre-tax profit declined to $1.1 billion from $2.8 billion a year ago.
In North America, revenues fell 8% to $21.8 billion. Wholesale volumes declined 11% year over year to 687,000 units. Further, pre-tax profit decreased to $1.26 billion from $2.91 billion due to the launch impact of the all-new Super Duty, the dealer stock reduction for F-150 versus the year-ago increase, normalization of series mix on F-150 and the previously announced door latch recall.
In South America, revenues plunged 15% to $1.3 billion due to lower volume and unfavorable exchange. Wholesale volumes fell 13% to 89,000 units. Pre-tax loss amounted to $295 million, wider than a pre-tax loss of $163 million in the prior-year quarter due to the unfavorable effects of inflation and weaker local currencies.
In Europe, revenues declined 10% to $6.3 billion. Wholesale volumes fell 15% to 320,000 units. The region recorded a pre-tax profit of $138 million, compared to $9 million a year ago. The upside was driven by improved cost performance, strong mix, and favorable balance sheet exchange.
In the Middle East & Africa segment, revenues declined 14% year over year to $0.8 billion. Wholesale volumes fell 14% to 36,000 units. The region reported a pre-tax loss of $152 million compared to $15 million in the year-ago quarter.
In the Asia-Pacific region, revenues increased 16% year over year to $3.1 billion. Meanwhile, wholesale volumes surged 30% to 398,000 units. Market share in the region was 4.0%, compared to the year-ago level of 3.5%. The Asia-Pacific region reported a pre-tax profit of a record $131 million, up from $22 million in the year-ago quarter.
Financial Services
Ford Credit reported a 5% rise in pre-tax profit to $567 million in the third quarter of 2016.
All Other
All Other – consisting primarily of net interest expense – reported a pre-tax loss of $223 million compared with $163 million in the year-ago period.
Financial Position
Ford had cash and cash equivalents of $13.34 billion as of Sep 30, 2016, down from $14.27 billion as of Dec 31, 2015. Automotive debt increased to $13.1 billion as of Sep 30, 2016, from $12.8 billion as of Dec 31, 2015.
In the first nine months of 2016, the company’s cash flow from continuing operations increased to $17 billion from $14.1 billion a year ago. Automotive operating cash flows deteriorated to $4.9 billion in the first nine months of 2016 from $5.2 billion reported in the year-ago period. Capital expenditures declined to $4.91 billion from $5.36 billion in the first nine months of 2015.
2016 Guidance
The company reaffirmed its 2016 pre-tax profit guidance of around $10.2 billion. This means that the pre-tax results are projected to decline from $10.8 billion in 2015.
Ford reaffirmed its 2016 automotive revenue to be equal to or higher than 2015 levels. The company also anticipates recording strong Automotive segment operating cash flow, albeit below 2015 levels. However, adjusted earnings per share and automotive operating margin are now expected to be lower than 2015.
Ford expects 2016 pre-tax profit in North America to be lower than the 2015 level of $9.3 billion. The company expects operating margin in North America to be lower than 10.2% recorded in 2015.
Further, Ford expects to report higher loss from South America than $832 million incurred in 2015. In Europe, the company anticipates higher profits compared to $259 million recorded in 2015. In the Middle East and Africa unit, it expects to record lower profits than $31 million in 2015. In the Asia-Pacific, Ford estimates pre-tax profit to be lower than the 2015 level of $765 million.
Moreover, the automaker expects that Ford Credit’s profits in 2016 will be lower than the 2015 level of $2.1 billion.
Zacks Rank
Ford currently carries a Zacks Rank #5 (Strong Sell).
Goodyear has seen its earnings estimates move north over the last 60 days.
Tata Motors has a long-term expected growth rate of 3.60%.
Standard Motor has a long-term expected growth rate of 15%.
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Ford's (F) Q3 Earnings Surpass Expectations, Decline Y/Y
Ford Motor Co. (F - Free Report) posted adjusted earnings per share of 26 cents in the third quarter of 2016 that was 26 cents lower than the figure recorded in third-quarter 2015 (excluding special items). However, earnings per share comfortably surpassed the Zacks Consensus Estimate of 21 cents. Pre-tax income (excluding special items) was $1.4 billion, $1.7 billion lower than the year-ago quarter figure.
Net income attributable to Ford was $957 million, compared to $2.19 billion recorded in the year-ago quarter.
Revenues in the reported quarter fell $2.2 billion to $35.9 billion.
Ford Automotive
Ford Automotive logged revenues of $33.3 billion, surpassing the Zacks Consensus Estimate of $32.02 billion. Revenues were $2.5 billion lower year over year. Wholesale volumes decreased 66,000 units to 1.53 million units. Pre-tax profit declined to $1.1 billion from $2.8 billion a year ago.
FORD MOTOR CO Price, Consensus and EPS Surprise
FORD MOTOR CO Price, Consensus and EPS Surprise | FORD MOTOR CO Quote
In North America, revenues fell 8% to $21.8 billion. Wholesale volumes declined 11% year over year to 687,000 units. Further, pre-tax profit decreased to $1.26 billion from $2.91 billion due to the launch impact of the all-new Super Duty, the dealer stock reduction for F-150 versus the year-ago increase, normalization of series mix on F-150 and the previously announced door latch recall.
In South America, revenues plunged 15% to $1.3 billion due to lower volume and unfavorable exchange. Wholesale volumes fell 13% to 89,000 units. Pre-tax loss amounted to $295 million, wider than a pre-tax loss of $163 million in the prior-year quarter due to the unfavorable effects of inflation and weaker local currencies.
In Europe, revenues declined 10% to $6.3 billion. Wholesale volumes fell 15% to 320,000 units. The region recorded a pre-tax profit of $138 million, compared to $9 million a year ago. The upside was driven by improved cost performance, strong mix, and favorable balance sheet exchange.
In the Middle East & Africa segment, revenues declined 14% year over year to $0.8 billion. Wholesale volumes fell 14% to 36,000 units. The region reported a pre-tax loss of $152 million compared to $15 million in the year-ago quarter.
In the Asia-Pacific region, revenues increased 16% year over year to $3.1 billion. Meanwhile, wholesale volumes surged 30% to 398,000 units. Market share in the region was 4.0%, compared to the year-ago level of 3.5%. The Asia-Pacific region reported a pre-tax profit of a record $131 million, up from $22 million in the year-ago quarter.
Financial Services
Ford Credit reported a 5% rise in pre-tax profit to $567 million in the third quarter of 2016.
All Other
All Other – consisting primarily of net interest expense – reported a pre-tax loss of $223 million compared with $163 million in the year-ago period.
Financial Position
Ford had cash and cash equivalents of $13.34 billion as of Sep 30, 2016, down from $14.27 billion as of Dec 31, 2015. Automotive debt increased to $13.1 billion as of Sep 30, 2016, from $12.8 billion as of Dec 31, 2015.
In the first nine months of 2016, the company’s cash flow from continuing operations increased to $17 billion from $14.1 billion a year ago. Automotive operating cash flows deteriorated to $4.9 billion in the first nine months of 2016 from $5.2 billion reported in the year-ago period. Capital expenditures declined to $4.91 billion from $5.36 billion in the first nine months of 2015.
2016 Guidance
The company reaffirmed its 2016 pre-tax profit guidance of around $10.2 billion. This means that the pre-tax results are projected to decline from $10.8 billion in 2015.
Ford reaffirmed its 2016 automotive revenue to be equal to or higher than 2015 levels. The company also anticipates recording strong Automotive segment operating cash flow, albeit below 2015 levels. However, adjusted earnings per share and automotive operating margin are now expected to be lower than 2015.
Ford expects 2016 pre-tax profit in North America to be lower than the 2015 level of $9.3 billion. The company expects operating margin in North America to be lower than 10.2% recorded in 2015.
Further, Ford expects to report higher loss from South America than $832 million incurred in 2015. In Europe, the company anticipates higher profits compared to $259 million recorded in 2015. In the Middle East and Africa unit, it expects to record lower profits than $31 million in 2015. In the Asia-Pacific, Ford estimates pre-tax profit to be lower than the 2015 level of $765 million.
Moreover, the automaker expects that Ford Credit’s profits in 2016 will be lower than the 2015 level of $2.1 billion.
Zacks Rank
Ford currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the auto space include The Goodyear Tire & Rubber Company (GT - Free Report) , Tata Motors Limited and Standard Motor Products Inc. (SMP - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Goodyear has seen its earnings estimates move north over the last 60 days.
Tata Motors has a long-term expected growth rate of 3.60%.
Standard Motor has a long-term expected growth rate of 15%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>