Earnings preview: Will Ford ride a bull in Q3?

The whole auto industry is going through an evolutionary period with high volatility and uncertainty, which is visible in all major stocks including Ford (F), General Motors (GM), Fiat Chrysler Automobiles (FACU) and Toyota Motors (TM). As Ford reports third-quarter earnings after market close on October 24, it will not only set the yardstick for the rest of the auto industry earnings this quarter but will also provide a glimpse of where the sector is headed.

The company has already dropped hints that it may see another revenue decline for the recently ended quarter, as it reported an 11% dip in September US auto sales. While SUVs and pickups continue to drive sales for Ford, demand and sale of sedans have been pretty sluggish recently.

The same goes for Ford rivals also. US sales of General Motors slipped 11% in Q3, while that of Toyota fell 6%. However, Fiat managed to buck this trend by posting a 10%  increase in sales in the third quarter.

Meanwhile, profits have not been dented much, as average transaction price per vehicle increased to $1,500. The automakers’ decision to cut a good portion of its workforce should also ensure enough liquidity within the stock.

China, Europe issues force Ford Q2 profit down

Investors are waiting to see how CEO Jim Hackett is planning to restructure the company and would be keenly listening for any hints on the same. The impact of the US-China trade war on the production and distribution of goods into the Asian market is also likely to be discussed during the Q3 earnings conference call.

Ford shares have shed 32% of its value during the year-to-date period.

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