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Ford Stock Rose despite Weaker Q1 Revenue and Market Share

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Ford’s revenues in Q1 2019

On Thursday, Ford Motor Company (F) released its first-quarter results, which drove its stock up by 7.1% in the after-market session. While the company managed to beat Wall Street analysts’ earnings as well as revenue estimates, its revenue fell on a YoY basis. In the first quarter, Ford’s global revenue from all segments stood at $40.3 billion, down 3.9% from its $42.0 billion revenue in the first quarter of 2018.

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Automotive revenue versus sales

In the quarter ended March 2019, Ford’s revenue from the automotive segment fell 4.5% YoY to $37.2 billion as compared to $39 billion a year ago. This drop in automotive revenues was primarily driven by a 14.3% YoY decline in the company’s global wholesales to 1.43 million vehicle units globally. Also, Ford’s global market share fell to 5.9% in the first quarter this year as compared to 6.5% a year ago.

Ford blamed global industrywide demand weakness, discontinuation of its Ford Focus compact car in North America, and the production ramp-up for its new Explorer SUV for its global vehicle sales decline.

Solid home market performance

In North America, Ford reported revenue of $25.4 billion in the first quarter, up about 2.4% from $24.8 billion in the first quarter of 2018. The company managed to report these YoY gains in revenue from the region despite a ~5.4% YoY drop in its North America wholesales volume as the company discontinued selling its Focus car in the market.

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

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