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Ford and Tesla Stocks Bleed after Q2 Earnings

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Jul. 25 2019, Updated 2:12 a.m. ET

On July 24, the stocks of both Ford Motor Company (F) and Tesla (TSLA) bled after the companies reported their second-quarter earnings. Today’s Ford earnings quickly led to a massive sell-off in F shares after the company released its Q2 results.

The legacy car maker reported adjusted earnings of $0.28 per share for the second quarter of 2019. This figure reflects a rise of 3.7% from Ford’s adjusted earnings of $0.27 in the second quarter of 2018. The results also came in worse than Wall Street analysts’ estimate of $0.31 per share, hurting investor sentiment. Ford stock tanked about 7.3% in the aftermarket session.

Before we move on to Tesla, take a look at some other key highlights of the Ford earnings report that might have disappointed investors.

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Ford earnings show tanking market share in Q2

In the quarter that ended in June 2019, Ford’s global market share fell to 6.2% from 6.7% a year ago. The company’s market share fell by 0.5% to 6.1%, based on the first half of 2019’s sales data.

One of the drivers reducing its market share was an almost 9% year-over-year decline in the company’s wholesale to 1.36 million units in the second quarter. In the first half of this year, Ford’s wholesale units fell about 12% to 2.79 million.

Positive product mix drove revenue

Despite lower sales volume, Ford’s revenue remained nearly flat at $38.9 billion, mainly due to a positive product mix, especially in North America. The average transaction price for the company’s most popular vehicles—F-Series pickup trucks—strengthened further. Solid F-Series sales helped the company report about a 1% year-over-year rise in revenue from the region.

The combined sales of Ford’s SUVs—such as the Expedition, Eco-Sport, and Edge—rose about 14% year-over-year.

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Ongoing strength in US pickup truck and SUV sales could be one reason for the higher demand of Ford’s refreshed range of vehicles in the segment. General Motors (GM), Fiat Chrysler Automobiles (FCAU), Toyota (TM), and Honda (HMC) have also tried to expand their SUV and truck lineups in recent years. Demand for General Motors’ Chevrolet Silverado, Fiat Chrysler’s Ram, Toyota’s Tacoma, and Honda’s Ridgeline has risen lately.

Ford earnings: Revised 2019 guidance

During the company’s first-quarter earnings event, Ford said that its 2019 adjusted EBIT margin would improve compared to 2018. However, the company revised its 2019 guidance today. Now Ford expects adjusted EBITDA between $7.0 billion and $7.5 billion this year. This range is flat to slightly up from its $7.0 billion in 2018. This guidance revision could also have caused Ford stock to tank after its second-quarter earnings event on Wednesday.

Year-to-date, Ford stock is up 32.9%, outperforming the broader market. Meanwhile, GM, Fiat Chrysler, and Toyota are up 21.7%, 6.1%, and 13.5%, respectively.

In contrast, Honda and US electric carmaker Tesla (TSLA) have slipped 0.9% and 21.8%, respectively.

Tesla also released its Q2 results

After Ford’s earnings release on July 24, Tesla also reported its second-quarter earnings. The company reported a much-wider-than expected adjusted net loss of $1.22 per share. The company’s total revenue rose 59% year-over-year and 40% sequentially.

However, Tesla stock also saw massive sell-off after the Ford earnings release. It tanked 10.7% in Wednesday’s aftermarket session.

Stay tuned for more detailed analysis of Tesla’s second-quarter earnings.

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