Back to top

Image: Bigstock

Ford (F) Beats Q3 Earnings and Sales Estimates, Trims View

Read MoreHide Full Article

Ford Motor Company (F - Free Report) delivered third-quarter 2019 adjusted earnings per share (EPS) of 34 cents, beating the Zacks Consensus Estimate of 26 cents. In the prior-year quarter, adjusted earnings were 29 cents per share. This outperformance resulted from the higher-than-anticipated automotive sales in the firm’s North America, Middle East and Africa segments.

In the third quarter, the company reported adjusted earnings before interest and taxes (EBIT) of $1.8 billion and adjusted EBIT margin of 4.8%, up from the $1.7 billion and 4.4% witnessed in the year-earlier quarter, respectively.

During the reported quarter, Ford generated automotive revenues of $33,931 million. The figure surpassed the Zacks Consensus Estimate of $33,818 million. In the prior-year quarter, the figure amounted to $34,660 million.

Ford Automotive

During the quarter, wholesale volume in the Ford Automotive segment declined 8% to 1.24 million. EBIT declined $73 million to $1.3 billion.

In North America, revenues climbed 5% year over year to $23.4 billion during the September-end quarter. Wholesale volume edged down 1% to 693,000 units. Further, EBIT was $2.01 billion, marking a rise of $52 million from the year-ago quarter.

In South America, revenues declined 19% year over year to $1 billion. Wholesale volume slipped 16% to 79,000 units.

In Europe, revenues fell 14% to $6.4 billion. Wholesale volume decreased 15% to around 303,000 units. The region reported a negative EBIT of $179 million.

In the Middle East & Africa segment (MEA), revenues declined 2% year on year to come in at $0.6 billion. Further, wholesale volume declined 4% to 24,000 units. The region reported a negative EBIT of $27 million.

In the Asia-Pacific region, excluding China, revenues dropped 12% to $1.7 billion. Wholesale volume dipped 19% to 65,000 units. Further, the region reported a negative EBIT of $31 million.

In China, revenues jumped 27% year over year to $0.9 billion. Further, wholesale volume declined 12% to $134,000 units.

Financial Position

Ford had cash and cash equivalents of $20.5 billion as of Sep 30, 2019 compared with $16.7 billion as of Dec 31, 2018. Automotive long-term debt stood at $12.6 billion, reflecting an year-on-year increase from 11.2 billion.

Looking Forward

Ford has lowered its 2019 outlook amid higher warranty costs, sagging sales in China, along with high incentive spending in North America. The company now expects full-year adjusted EBIT in the range of $6.5 billion to $7 billion compared with the prior year’s $7 billion.

Adjusted EPS is anticipated in the range of $1.20-$1.32 compared with $1.30 recorded a year ago. The range assumes a full-year adjusted effective tax rate in the 12-13% band.

Ford continues to expect lower full-year structural costs in its Automotive business, excluding. The company still anticipates full-year growth in adjusted free cash flow, its most important financial measure, driven by Automotive.

In its Automotive sector, Ford continues to expect lower full-year structural costs, excluding pensions and other post-employment benefits, and sustained strength in Ford Credit. The firm also anticipates full-year increases in adjusted free cash flow, led by Automotive, its most significant financial metric.

Zacks Rank & Stocks to Consider

Ford currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks worth considering are BRP Inc. (DOOO - Free Report) , sporting a Zacks Rank #1 (Strong Buy), Standard Motor Products, Inc. (SMP - Free Report) and Alarm.com Holdings, Inc. (ALRM - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP has an expected earnings growth rate of 18.49% for 2019. The company’s shares have rallied 4.6% in the past year.

Standard Motor has a projected earnings growth rate of 21.96% for the current year. Its shares have gained around 16.6% over the past year.

Alarm.com has an estimated earnings growth rate of 5.26% for the ongoing year. The company’s shares have rallied roughly 10.5% in a year’s time.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>

Published in