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Ford’s 1Q17 Earnings Beat Estimates but Disappointed Investors

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Ford’s 1Q17 earnings

Ford Motor Company (F), the second-largest US automaker, released its 1Q17 earnings report on April 27, 2017. Its adjusted EPS (earnings per share) was $0.39, about 43.0% lower than the company’s adjusted EPS of $0.68 in the corresponding quarter of the previous year. However, it was marginally better than Wall Street analysts’ EPS estimate of $0.36 for 1Q17.

Now let’s see how investors reacted to Ford’s 1Q results on Wall Street.

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1Q results disappointed Wall Street

On the day of its 1Q17 earnings release, Ford stock witnessed a bearish movement and closed at $11.47, which was ~1.1% lower than its previous session’s closing price. The company’s shrinking year-over-year sales volume, lower profitability, and decreasing global market share continued to haunt investors in 1Q17. Many notable analysts were already expecting the downtrend in the company’s margins to continue.

Note that in January 2017, Ford had highlighted the risks and challenges it might face during the year and thus gave a dismal guidance for 2017.

At the beginning of 1Q17, the broader markets were positive with the S&P 500 benchmark (SPY) yielding 5.5% positive returns. However, investors’ concerns about Ford’s ability to revive its profitability took a toll on its stock. Ford stock remained negative and fell 7.1% in the first quarter this year.

In contrast, the stocks of other automakers such as General Motors (GM), Fiat Chrysler Automobiles (FCAU), and Ferrari (RACE) rose 1.5%, 19.8%, and 27.9%, respectively, in 1Q17.

Read Will Tesla’s 1Q17 Earnings Justify Stellar Year-to-Date Gains? to learn about analysts’ estimates for its upcoming earnings.

Series overview

In this series, we’ll explore Ford’s 1Q17 revenues and profitability and find out what factors drove them. We’ll take a closer look at some key challenges the company might face going forward in 2Q17. At the end of the series, we’ll look at some factors that could drive the company’s valuation in the coming quarters and take a glance at analysts’ recommendations after its dismal 1Q17 results.

Let’s start by looking at Ford’s 1Q17 revenues and the factors behind them.

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