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Earnings Preview: A bumpy ride ahead for Ford in 2019

Ford Motor Company (NYSE: F) is slated to report its fourth-quarter results on January 23 after the bell. The automaker this week has already alerted investors that earnings would miss analyst estimates which haven’t gone down well with the street sending the stock down more than 6% on January 16 post the preliminary results announcement.

The company now expects fourth-quarter adjusted EPS to come in at $0.30 compared to $0.32 expected by the street, and down 23% compared to last year. For the corresponding period last year, the auto major reported EPS of $0.39.

For the full year 2018, earnings per share is expected to be $1.30, which is $0.03 lower than analyst consensus and 27% lower than last year. It’s worth noting that last quarter the company expected adjusted earnings to come in the range of $1.30 to $1.50 per share.

Ford Motor Q3 profit drops 37% but beats estimates

When it comes to 2019 forecast, the auto major provided qualitative guidance stating that there would be growth in revenue, EBIT and cash flow over 2018. On the flip side, General Motors (GM) lifted its EPS outlook for 2019 to be between $6.50 and $7, surpassing analyst estimates. GM’s transformational strategy under the helm of Mary Barra seems to be working well amidst challenging global environment.

Ford declared a dividend of $0.15 per share for the first quarter, which remains unchanged from 2018 levels. The board has set a record date of January 31 and payable on March 31.

Last quarter the automaker reported a 37% slump in profits due to sluggish demand from the European and Chinese markets, but earnings exceeded analyst projections. Revenue saw an increase of 3% aided by the strong performance from the North American region.

Headwinds Galore

The company’s ongoing transformation strategy is to focus on products which would bring in high-margins and register high-growth. With the ongoing trade wars and spiraling costs coupled with flat global sales projected for 2019 and weak sales from China and European regions, there are multiple headwinds lined up against the firm which might impact the transformation plans and bottom line this year.

Ford’s plans might also be impacted due to trade-related issues it might face from Brexit if the UK takes the “no deal” route with European Union. Commenting on the issue, CFO Bob Shanks said, “Such a situation would be catastrophic for the UK industry and for Ford’s operations in the country.” To put things in perspective, UK is the biggest market for Ford in Europe and second biggest outside the US.

Investors would be expecting CEO Jim Hackett to shed more light on how the restructuring efforts are going to shape up in 2019. In addition, they would be expecting more details on the earnings outlook. Will investors’ patience bear fruit? We need to wait till next Wednesday to get answers from Ford’s top brass to know how the ride is going to be for the firm and investors.

Browse through our earnings calendar and get all scheduled earnings announcements, analyst/investor conference and much more!

Companies reporting earnings this week: Jan 22 – 25

A slew of major companies are reporting earnings this week. Healthcare giant Johnson & Johnson (JNJ) will announce fourth-quarter earnings on Tuesday before the bell. Analysts expect earnings to climb 12.10% to $1.95 per share while revenue will decline by 0.10% to $20.17 billion. The top line is likely to be hurt by the slower growth pace in the Pharmaceuticals segment as biosimilar and generic competition could pressure the segment.

Energy exploration firm Halliburton (HAL) will report fourth-quarter results on Tuesday. Analysts predict earnings of $0.37 per share on revenue of $5.88 billion. The inclement weather has negatively impacted the North American operations. The management believes the softness in the demand for completion services in the North American market will improve in the coming months. In addition, the company will be hurt by the continuing capacity squeeze in the Permian Basin.

International Business Machines Corp. (IBM) is set to post fourth-quarter results on Tuesday after the bell. Analysts expect earnings to fall 5.80% to $4.84 per share as lesser deals signed could hurt most of the revenue of the segments. Revenue is anticipated to decline by 3.50% to $21.75 billion. The top line is likely to be hurt by lower solutions software and transaction processing software sales.

Capital One Financial (COF) will post Q4 results on Tuesday. Analysts project the company to report earnings of $2.38 per share on revenue of $7.08 billion. The results will be benefited by lower provision for credit losses and a fall in income tax provision. The top line is likely to be hurt by lower non-interest income and a minor increase in net interest income.

Consumer goods giant Procter & Gamble (PG) will announce Q2 earnings on Wednesday before the bell. Earnings are expected to rise by 1.70% to $1.21 per share and revenue is likely to decline by 1.50% to $17.14 billion. The top line is likely to be hurt by a decline in other major segments despite higher demand for beauty products. The bottom line could be benefited from the gains due to the dissolution of the PGT Healthcare partnership and a lower tax rate.

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United Technologies Corp. (UTX) is set to post fourth-quarter results on Wednesday. Analysts project earnings to fall 4.40% to $1.53 per share due to the decision to split into three companies. Revenue is predicted to rise by 7.60% to $16.88 billion helped by organic sales growth, the absence of a nonrecurring charge incurred at Pratt & Whitney in the previous year quarter and foreign exchange headwind. The spin-off is beneficial in the top line while dilution could lower the adjusted earnings.

Comcast Corporation (CMCSA) will report Q4 earnings on Wednesday. Analysts see a profit of $0.62 per share on revenue of $27.57 billion. The top line is likely to be driven by increases in high-speed internet, higher distribution, theatrical, content licensing, and advertising revenue. The results will be benefited by the customer relationship growth accelerated on higher broadband net additions.

Ford Motor Company (F) could post Q4 results on Wednesday after the bell. Earnings are anticipated to drop by 17.90% to $0.32 per share and revenue is likely to decline by 3.90% to $37.01 billion. The results will be impacted by the continued challenges in the Europe and China market. Also, the company could be hurt by the major restructuring plan of its European operations including job cuts, factory closures and production stoppage for certain models.

Texas Instruments (TXN) will report Q4 earnings on Wednesday. Analysts see a profit of $1.24 per share on revenue of $3.75 billion. The results will be benefited by the management of costs and expenses as well as lower income taxes provision. The top line is likely to be hurt by the slower demand for its products across most markets.

As American Airlines Group Inc. (AAL) announces Q4 results on Thursday before the bell, analysts expect earnings of $1.04 per share on revenue of $10.98 billion. The bottom line is likely to be impacted by an increase in aircraft fuel price and higher operating expenses. Strong demand for air travel continues to favor the top line.

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America’s largest low-cost carrier, Southwest Airlines (LUV), is set to post fourth-quarter results on Thursday. Analysts expect earnings to jump 39% to $1.07 per share as it continues investing in and deploying new operations, technology, and airport infrastructure to support future growth. Revenue is anticipated to rise by 7.50% to $5.67 billion despite being weighed down by the rising fuel prices.

Semiconductor giant Intel (INTC) will post fourth-quarter results on Thursday after the bell. Analysts project the company to report earnings of $1.22 per share on revenue of $19.01 billion. The results will be driven by the strength across businesses and strong customer demand for Intel platforms. The company is likely to achieve revenue growth in every business segment. Data-centric and PC-centric businesses could remain the highlight among investors.

Coffee giant Starbucks (SBUX) will report first-quarter results on Thursday. Analysts predict earnings of $0.65 per share on revenue of $6.49 billion. The results could be hurt by the rising competition in the caffeinated beverage market. Also, concerns have been rising that the unique branding strategy and premium products are losing the appeal. Starbucks has been seeing a dip in customer traffic to its coffee shops and for regaining traffic, the company has been simplifying its business operations and adopting new strategies.

AbbVie Inc. (ABBV) will announce Q4 earnings on Friday before the bell. Earnings are expected to jump by 30.40% to $1.93 per share and revenue is likely to increase by 8.10% to $8.37 billion. The results will be benefited from the sales growth from Humira, Imbruvica, and HCV. The R&D expenses are likely to rise for the quarter due to more combinations are on road to the market.

As Colgate-Palmolive (CL) announces Q4 results on Friday, analysts expect earnings of $0.73 per share on revenue of $3.78 billion. The results could be a challenging one with category growth rates remaining soft in many markets and unfavorable movements in foreign exchange. Market volatility in Brazil and trade inventory reductions in China could hurt the top line.

 

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