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Why Ford Underperformed Its Peers in 3Q16

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Nov. 20 2020, Updated 4:27 p.m. ET

Ford Motor Company

Ford Motor Company (F) is set to release its 3Q16 earnings report on October 27, 2016. The company is the second-largest US automaker by volume after General Motors (GM). Before we find out what investors should expect from the company’s upcoming earnings, let’s explore how Ford’s stock performed in the third quarter of 2016.

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Stock performance

The broader market (SPY) largely remained mixed in August and September 2016, and the S&P 500 Index rose 3.3% in 3Q16. Since the beginning of the quarter, stocks of mainstream automakers have witnessed a roller coaster ride.

During the quarter, Ford underperformed its direct peers including General Motors (GM) and Fiat Chrysler (FCAU). While Ford lost about 4% in 3Q16, its peers GM and FCAU rose 12.3% and 4.6%, respectively. Thus, Ford continued to post negative returns for the third quarter in a row. Previously in 2Q16, Ford’s stock slid 6.9% in comparison to a 1.9% increase in the S&P 500 benchmark. In 2Q16, stocks of other mainstream automakers such as GM and Fiat Chrysler (FCAU) also fell 10.0% and 23.7%, respectively.

Investors’ concerns about Ford’s ability to achieve its fiscal 2016 guidance could be the primary reason for this decline. During its 2Q16 earnings release, Ford highlighted the risks and challenges it might face in achieving its 2016 guidance.

Series overview

Harley-Davidson (HOG) released its 3Q16 earnings on October 18, 2016. Despite dismal earnings, its stock has zoomed up. Read Harley-Davidson Investors Release Their Own Earnings Surprise to learn more.

In this series, we’ll explore Wall Street analysts’ revenue and margins estimates and recommendations for Ford’s 3Q16 earnings. Also, we’ll find out what other key announcements investors can expect from the company’s upcoming earnings.

We’ll begin with a quick recap of Ford’s 2Q16 earnings and then we’ll move on to the company’s 3Q16 earnings estimates.

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