Analysts Expect Ford’s 3Q16 Results to Disappoint



Ford’s 3Q16 earnings

Previously, we looked at how Ford (F) has underperformed its peers on Wall Street in 3Q16. Analysts are estimating that Ford will post weak 3Q earnings. In this part, we’ll find out what analysts are estimating from Ford’s 3Q16 earnings in detail. But first, let’s take a quick look at the company’s most recent earnings.

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Existing trend

In 2Q16, Ford’s adjusted EPS (earnings per share) came in at $0.52, 11% higher than the company’s earnings of $0.47 per share in the corresponding quarter of the previous year. However, this figure was much lower than Wall Street analysts’ EPS estimate of $0.60 for 2Q16. The company’s strong US sales for the quarter was one of the major reasons behind its higher earnings.

With this, Ford also managed to post positive year-over-year (or YoY) growth in its earnings for the fifth consecutive quarter as shown in the chart above.

Will the positive trend continue?

Analysts are expecting the existing positive trend in Ford’s earnings to come to an end for now. According to these estimates, the company will post EPS (earnings per share) of $0.21 in 3Q16, which is less than half of Ford’s EPS of $0.45 in the corresponding quarter of 2015.

A possible slowdown in US auto sales along with the company’s dismal fiscal 2016 guidance could be two key reasons behind this lower expectation. Moreover, analysts expect Ford’s fiscal 2016 EPS to remain lower at $1.80 as compared to $1.93 in fiscal 2015.

Peer comparisons

Among Ford’s peers (IYK), analysts estimate that General Motors (GM) and Fiat Chrysler (FCAU) will post YoY increases in their 3Q16 earnings. General Motors is set to release its 3Q16 earnings on October 25, 2016, while Fiat Chrysler and Tesla (TSLA) will announce their 3Q16 results on October 26, 2016.

GM is expected to post adjusted EPS of ~$1.45 for the quarter, which would be a 4% YoY drop. In comparison, FCAU’s third quarter earnings are estimated to be around 0.36 euros (~$0.40) as compared to 0.20 euros (~$0.22) in 3Q15.

Continue to the next part to know what analysts are recommending for Ford ahead of its 3Q16 earnings.


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