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Ford (F) Drives Past Q2 Earnings Estimates, Revenues Miss

Ford Motor Co. F posted adjusted earnings per share of 56 cents in the second quarter of 2017. The reported figure was 4 cents higher than the year-ago figure. Also, earnings surpassed the Zacks Consensus Estimate of 44 cents per share. Results were driven by lower tax rate.

Adjusted pre-tax profit was $2.5 billion, reflecting a decline of $0.5 billion from the year-ago quarter.

Second-quarter net income came in at $2 billion, increasing $0.1 billion from the year-ago quarter.

Ford logged automotive revenues of $37.1 billion, lagging the Zacks Consensus Estimate of $38 billion. Automotive revenues in the prior year-ago quarter were $36.9 billion.

Ford Automotive

Wholesale volumes at the Ford Automotive segment decreased 43,000 units to 1.65 million. Pre-tax profit declined to $2.2 billion from $2.8 billion in the year- ago quarter.

In North America, revenues increased $0.7 billion to $24.5 billion. Wholesale volumes declined 1% year over year to 807,000 units. Further, pre-tax profit decreased to $2.2 billion from $2.7 billion in second-quarter 2016.

In South America, revenues increased $0.2 billion to $1.5 billion. Wholesale volumes rose 12% to 93,000 units. Pre-tax loss amounted to $185 million, narrower than $265 million in the prior-year quarter. The loss was due to an improving but weak economy.

In Europe, revenues declined $1 billion to $7.1 billion. Wholesale volumes decreased by 55,000 year over year to 375,000 units. The region recorded pre-tax profit of $88 million, decreasing $379 million from the prior-year quarter.

In the Middle East & Africa segment, revenues declined 0.4 billion year over year to $0.6 billion. Wholesale volumes plunged 14,000 units to 24,000 units. The region reported a pre-tax loss of $53 million, narrowing down from the prior-year quarter loss of $65 million.

In the Asia-Pacific region, revenues of $3.4 billion improved 21% year over year. Wholesale volumes rose 7% to 352,000 units. The Asia-Pacific region reported a pre-tax profit of $143 million, up from the year-ago quarter loss of $8 million.

Financial Services

Ford Credit recorded best pre-tax profit since 2011. The unit recorded around 55% year-over-year increase in pre-tax profit during the quarter.
 
Financial Position

Ford had cash and cash equivalents of $16.2 billion as of Jun 30, 2017, down from $17.1 billion as of Jun 30, 2016.

2017 Guidance

The company expects 2017 adjusted EPS to be in the range of $1.65–$1.85. Also, the company expects adjusted effective tax rate to be 15%.

Zacks Rank and Top Picks

Ford currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the auto space include Allison Transmission Holdings, Inc. ALSN, Volkswagen AG VLKAY and Ferrari N.V. RACE.
 
While both Allison Transmission Holdings and Volkswagen sport a Zacks Rank #1 (Strong Buy), Ferrari carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission, Volkswagen and Ferrari have a long-term expected growth rate of 11%, 17.3% and 14.1%, respectively.

Ford Motor Company Price, Consensus and EPS Surprise

Ford Motor Company Price, Consensus and EPS Surprise | Ford Motor Company Quote

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