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Why Did Ford’s 4Q16 Revenues Fall?

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Jan. 27 2017, Published 4:15 p.m. ET

Ford’s revenues in 4Q16

In 4Q16, Ford’s (F) revenues stood at $38.7 billion, down $1.6 billion from its revenues in 4Q15. However, its revenues were higher than analysts’ revenues estimates of $35.1 billion for 4Q16. Now, let’s find out what drove Ford’s 4Q16 revenues lower.

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Weaker North America

In North America, Ford (F) reported 4Q16 revenues of $23.1 billion, which represents a 7% decline from $24.9 billion in 4Q15. These lower revenues were primarily due to the company’s 13% lower sales volume in the region. In its earnings report, the company attributed these lower sales for the quarter to the “unfavorable stock changes” as Ford focused on dealer stock reductions to align with demand.

According to the company’s estimates, Ford’s North America market share in 4Q16 also fell to 13.1% from 13.6% in 4Q15. During the quarter, demand for pickup trucks and utility vehicles remained strong in the US market.

2016 US sales comparison

In 2016, Ford Motor Company’s (F) total US vehicle sales were flat at 2.6 million units. The fiscal 2016 US sales volume of automakers (XLY) General Motors (GM) and Fiat Chrysler Automobiles (FCAU) fell 1.3% and 0.4%, respectively.

Japanese automaker Toyota (TM) also maintains good exposure to the North American auto market. Toyota also reported a drop of ~2% in its fiscal 2016 US sales.

Please continue to the next part to examine Ford’s 4Q16 revenues and sales in Europe.

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