Categories AlphaGraphs, Earnings

Ford Motor Q3 profit drops 37% but beats estimates

Ford Motor Company (F) reported a 37% dip in earnings for the third quarter due to continued challenges in the Europe and China market. However, the company’s quarterly results exceeded market expectations. Following this, the stock inched up over 6% in the after-hours trading.

Net income dropped to $991 million or $0.25 per share from $1.57 billion or $0.39 per share in the prior-year period. Adjusted EPS fell to $0.29 from $0.44 a year ago.

However, total revenues rose 3% to $37.6 billion driven by a favorable mix of higher margin products and high-end trim levels, especially in North America.

Ford third quarter 2018 Earnings Infographic
Ford Motor Q3 2018 Earnings Infographics

Revenues in the Automotive Segment rose 3% to $34.7 billion. Business in North America remained strong on improved mix consistent with the continued shift to utilities and trucks. Market share in North America declined slightly by 0.1 points due to lower car sales, offset partially by gains in SUVs, trucks, and vans.

Ford had a challenging quarter in South America, Middle East & Africa, and the Asia Pacific. The company reaffirmed its adjusted EPS for the full year 2018 in the range of $1.30 to $1.50 and positive cash flow that will be lower than 2017.

Due to higher costs and uncertainty impacting the entire sector, coupled with unexpected deterioration this year in the Europe and China business, the current company forecasts show that it will not reach its previously announced 8% EBIT margin or high teens ROIC targets by 2020. However, Ford continues to attack costs, increase the operational fitness of the business and remains committed to hitting these targets over time.

Ford’s rival General Motors (GM) is expected to release its third-quarter results on October 31 before the market opens. The auto industry expects negative impacts from the tariff issues going on between the US and China.

Shares of Ford ended Wednesday’s regular session down 4.77% at $8.18 on the NYSE. The stock has fallen over 32% in the past year and over 34% in the year so far.

 

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