Ford Motor Company
Today, investors seem to be showing in disappointment in America’s second-largest carmaker, Ford Motor Company (F). The stock has underperformed the S&P 500 Index for the last six years. As of Tuesday’s closing, a sharp recovery of 15.6% in January came as a relief for investors. However, after a steep sell-off today, the stock might not be able to sustain these gains long.
Let’s take a quick look at Ford’s announcements today before we discuss recent weakness in US F-Series sales.
This morning, in its SEC filing, Ford said it expects its adjusted EPS at $1.30. This EPS expectation reflected a 36.9% year-over-year fall, and it was also down from Wall Street’s expectations of $1.33, according to Thomson Reuters.
Plus, the company gave a mixed to a slightly negative outlook for 2019. In the SEC filing, CFO Bob Shanks said that he sees “the potential for year-over-year improvement” in the company’s financials in 2019.
In December, Ford reported an 8.8% year-over-year decline in its December sales to 220,774 units. December was the fourth consecutive month that Ford’s F-Series sales fell. Last month, Ford’s F-Series sales fell 1.8% year-over-year to 87,772 units. From September to November, F-Series sales tanked 5.8% year-over-year.
While US demand for passenger cars has been falling, automakers’ reliance on pickup truck sales has increased, which helps them protect their profit margins. This is why a continually negative trend in US F-Series sales, which might have already started in 2018, could be disastrous for the company.
In the fourth quarter last year, Ford fell 17.3%. Other automakers (XLY) General Motors (GM), Fiat Chrysler (FCAU), Honda (HMC), and Toyota (TM) ended the quarter with 0.7%, 17.4%, 12.1%, and 6.7% losses, respectively. By comparison, the S&P 500 Index (SPY) fell 14.0%.