Ford blows away earnings expectations as consumers buy up trucks during pandemic

Ford Motor blew away Wall Street expectations as properly as the corporate’s forecast earnings for the third quarter on stronger-than-expected demand during the coronavirus pandemic.

Here’s how Ford carried out versus what Wall Street anticipated, primarily based on common analysts’ estimates compiled by Refinitiv.

  • Adjusted EPS: 65 cents vs 19 cents anticipated
  • Automotive income: $34.71 billion vs $33.51 billion anticipated

Ford’s inventory jumped greater than 7% during after-hours buying and selling earlier than leveling off at about $8.05 a share, up 4.5%. The inventory closed Wednesday at $7.70, down 2.8%.

In his first quarterly earnings name with analysts as CEO, Jim Farley promised Wall Street higher transparency — one thing his predecessor, Jim Hackett, was criticized for not doing. Farley succeeded Hackett efficient Oct. 1.

“My commitment to each of you is transparency, including purposeful, measurable key performance indicators so you can objectively track our progress,” he informed analysts. Farley stated further data, together with monetary targets, shall be mentioned within the spring.

Ford greater than doubled its adjusted pretax earnings from a yr earlier to $3.6 billion within the third quarter. The firm’s web revenue was $2.34 billion during the third quarter, up from roughly $423 million a yr earlier. Its whole income additionally elevated by about $500 million to $37.5 billion from the third quarter of 2019.

“We executed very well this quarter,” Ford CFO John Lawler stated Wednesday during a media briefing. “We saw much higher demand than what we expected.”

Ford’s earnings within the third quarter had been led by its operations in North America, which made $3.18 billion on income of $25.Three billion. That included stronger-than-expected demand and a wealthy combine for widespread Ford trucks and SUVs as properly as industrial automobiles.

Incoming Ford CEO Jim Farley (left) and Ford Executive Chairman Bill Ford Jr. pose with a 2021 F-150 during an occasion Sept. 17, 2020 on the firm’s Michigan plant that produces the pickup.

Michael Wayland / CNBC

Due to prices associated to new or redesigned car launches towards the tip of the yr, the corporate forecast adjusted earnings for the fourth quarter to be between break even and a $500 million loss. That would preserve the corporate within the black for the yr.

Ford expects a 100,000 discount in wholesale shipments of its worthwhile F-150 pickups within the fourth quarter as the corporate steadily ramps up manufacturing of a redesigned model of the truck, Lawler stated.

Former Ford CFO Tim Stone, who left the corporate earlier this month, informed buyers in July that the automaker anticipated earnings on an adjusted pretax foundation of between $500 million and $1.5 billion for the third quarter. That would have been down from $1.Eight billion within the third quarter of 2019.

Ford ended the third quarter with money of practically $30 billion and whole liquidity of greater than $45 billion after absolutely repaying $15 billion in revolving credit score drawn down within the first quarter within the early days of the pandemic.

Lawler declined to touch upon when the corporate expects to reinstate its prized dividend, which it suspended in March as a result of pandemic.

Ford’s shares stay down by 17% to date this yr, regardless of a 15% improve within the inventory value in October.

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