Ford Motor Company’s (F) second-quarter earnings results are scheduled for release on July 24. So far, Ford stock has outperformed legacy peers such as General Motors (GM) and electric vehicle makers such as Tesla (TSLA) and NIO. Based on their July 22 closing prices, Ford has gained 37.4%, and General Motors has gained 19.2%. Both Tesla and NIO are having terrible years and have seen negative price action of 23.2% and 47%, respectively, year-to-date. Tesla’s second-quarter earnings release is also scheduled for July 24.
Second-quarter earnings estimates
Ford shattered analysts’ earnings estimates in the first quarter. The company posted adjusted EPS of $0.44 in the quarter, almost 66% higher than what analysts were expecting. The market also rewarded the stock for its better-than-expected earnings, and it soared more than 7% after its earnings release. Let’s see what analysts expect from Ford’s second-quarter earnings results.
Analysts polled by Thomson Reuters expect Ford to post revenue of $35.0 billion in the second quarter. In contrast, it posted revenues of $37.2 billion in the first quarter and $35.9 billion in the second quarter of 2018. Ford’s revenue also fell YoY (year-over-year) in the first quarter. The fall in its revenue wasn’t entirely surprising. Automotive sales have been weak globally—including in the US, Ford’s biggest market. China’s car sales have also plummeted. However, we saw a rebound in Chinese car sales in June. General Motors has more exposure than Ford in China. Weakness in China’s automotive market could be driving General Motors’ underperformance.
Ford’s second-quarter US sales
In the second quarter, Ford’s US sales fell 4.1% YoY to 650,336 units. Ford’s F-Series truck sales fell 1.3% YoY to 233,787 units in the second quarter. In the first quarter, the company’s F-Series sales rose marginally YoY. Falling vehicle sales could take a toll on Ford’s second-quarter revenue. If we look at Ford’s second-quarter earnings estimates, we can see that analysts expect the company to post adjusted EPS of $0.31. In contrast, it posted adjusted EPS of $0.44 in the first quarter and $0.27 in the second quarter of 2018.
It’ll be interesting to hear what the company has to say about metal prices during its second-quarter earnings call. When President Donald Trump imposed Section 232 tariffs on US steel and aluminum imports, Ford said that the tariffs would cost it $1 billion in profits. However, US steel prices have plummeted this year. President Trump has also granted Section 232 tariff exemptions to Canada and Mexico. During its earnings call, Ford might drop some hards truths about how the exemption could affect it.
Ford might also provide more updates on its collaboration with Volkswagen. The two companies announced a collaboration in the electric and autonomous vehicle spaces earlier this month. Automakers have lined up aggressive expansion plans for electric vehicle production. Historically, legacy automakers have treated electric vehicles like the poor cousin of internal combustion–powered cars. However, Tesla’s success and consumers’ gradual shift toward electric vehicles has forced automakers to revisit their plans. Read An Investor’s Guide to Tesla Motors for a detailed Tesla overview.