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Here’s Why Ford’s Q1 2019 Revenue Could Fall

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The trend in Ford’s revenue

In the fourth quarter of 2018, Ford Motor Company (F) reported revenues of $38.7 billion from its automotive segment, up 0.6% from its revenue in the fourth quarter of 2018. This revenue figure was also better than analysts’ estimate of $36.9 billion. The company’s global wholesale volume fell by 16% YoY in the fourth quarter. The favorable product mix has been driven by the high demand for pickup trucks and utility vehicles, and higher net pricing of vehicles helped Ford boost its fourth-quarter revenues from the automotive segment.

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Key legacy automakers (XLY) Ford, General Motors (GM), Fiat Chrysler (FCAU), and Toyota (TM) generate a large portion of their revenues from North America. In the quarter ended in December 2018, Ford reported a 7.1% YoY increase in its revenues from North America to $25.8 billion.

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Estimates for Q1 2019

Analysts estimate Ford will report a drop in its first-quarter automotive revenues. According to these estimates, Ford’s first-quarter revenues are expected to be at $37.1 billion this year, down 4.9% YoY. Investors should pay attention to these Wall Street analysts’ estimates as they may reflect market expectations.

In the last couple of years, Ford has faced challenges in some markets including Europe and other regions of Asia, as its sales and profitability from these regions have deteriorated. In the first quarter, the company’s sales in China and Europe continued to decline. Its US vehicle sales in the first quarter also fell by 1.6% YoY, which could affect its automotive segment revenues.

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