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Ford Stock Rallied over 4% Today despite Terrible December Sales

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Ford stock

Legacy automaker Ford Motor Company (F) has been disappointing investors for the last five years. The stock remained in negative territory in four of those five years, just not in 2017, when it yielded a still dismal 1.4% positive return. The company made big changes to its top leadership in May 2017, replacing its former CEO Mark Fields with Jim Hackett. But these efforts were in vain as it continued to yield a negative return, losing 38.3% in 2018.

Terrible December sales

Today, Ford’s stock posted a day high of $8.12, up about 4.4% from its previous session’s closing price. Yesterday, the company reported an 8.8% year-over-year decline in its December sales to 220,774 units despite holiday season discounts. This was the fourth consecutive month when Ford’s home market sales continued to fall on a year-over-year basis. December 2018 was also the fourth sequential month when its trucks segment sales, especially F-Series units, fell year-over-year.

Last month, Ford’s passenger car sales fell 27.8% year-over-year to 34,950 units. But more worrisome was a decline in its SUV and truck segment sales. The company posted 4.4% and 3.8% year-over-year declines in SUV and truck US sales, respectively.

Plus, the company continues to struggle in China. Its sales in the country had tanked 34% in the first 11 months of 2018 while it’s yet to report its December Chinese sales.

Then why did the stock go up?

Apart from today’s broader-market recovery, Ford’s consistency in F-Series US sales of over 70,000 units per month and solid F-Series pickup transaction prices could be the main reason for its stock rally today. In 2018, other mainstream automakers (XLY) General Motors (GM), Toyota (TM), and Fiat Chrysler (FCAU) also lost 24.7%, 11.9%, 26.5%, respectively.

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