What Helped Ford Beat Revenue Estimates in Q4 2018?



Ford’s fourth-quarter revenue

In the fourth quarter, Ford Motor Company’s (F) global revenue stood at $41.8 billion, a rise of ~1% YoY (year over year).

The company’s revenue from its Automotive segment was also better than Wall Street analysts’ estimates. Let’s take a look.

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Automotive revenue versus estimates

Ford’s fourth-quarter adjusted automotive revenue was $38.7 billion, up 0.6% from $38.5 billion in the fourth quarter of 2017 and also better than analysts’ consensus estimate of $36.9 billion.

The company’s global wholesale volumes fell 16% YoY in the quarter. An overall favorable product mix driven by high demand for pickup trucks and utility vehicles and higher net pricing of vehicles helped Ford boost its fourth-quarter automotive revenue.

Solid home-market performance

In North America, Ford reported revenue of $25.8 billion in the fourth quarter, up ~7.1% YoY, even though its North American wholesale volumes fell ~0.1% YoY. Higher demand for Ford’s premium trucks helped the company improve its revenue despite stagnation in its sales.

Note that Ford makes most of its revenue from the North American market. Similarly, other automakers (XLY) General Motors (GM), Fiat Chrysler Automobiles (FCAU), and Toyota Motor (TM) generate a significant portion of their revenues from North America.

Other than North America, Ford’s revenues fell in all its other key markets, including South America, Europe, the Middle East, and Africa, and the Asia-Pacific. These falls acted as headwinds to its overall revenue.

In the next article, we’ll see what other factors boosted Ford’s North American performance in the fourth quarter.


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