U.S. Markets closed

Can Trucks & Latest Launches Aid Ford (F) in Q1 Earnings?

Zacks Equity Research

On Apr 25, Ford Motor Company F will announce results for the first quarter of 2019, ended on Mar 29, 2019. In the last reported quarter, this carmaker’s bottom line missed the Zacks Consensus Estimate while automotive revenues surpassed the same.

Over the past three months, shares of Ford have outperformed the industry it belongs to. During that period, the stock has gained 9.1% in comparison with the industry’s growth of 1%.



The U.S. auto manufacturer already announced a plunge in vehicle sales across major markets, consisting of the United States, China and Europe. In first-quarter 2019, Ford announced a 1.6% year-over-year decline in units sold in the United States to 590,249 Ford and Lincoln vehicles. In China and Europe, sales dropped 35.8% and 6.2%, respectively.

Although the picture appears gloomy, the company’s range of trucks and SUVs, and newly launched vehicles, with favorable average transaction price, are likely to aid quarterly results. During the first quarter, its pickup trucks and SUVs sustained traction in the U.S. market, rising 4% and 5%, respectively, on a year-over-year basis. In China, the all-new Ford Focus and Ford Territory SUV have been well received by customers. In fact, quarterly unit sale of new Ford Focus rose 94% sequentially while 4,000 units of Territory SUV were sold in March, which was the first full month of this model’s presence in the market.

Consumers’ shifting preference toward big and spacious vehicles augmented Ford’s sale of trucks and SUVs. This encouraged the company to come up with a varied range of technically-enhanced and large interior vehicles. Further, the global drive toward clean-energy vehicles impelled this automaker to offer vehicles with non-combustion engines.

In April, Ford announced the plan to launch more than 30 vehicle models in China, of which over a third will be electric vehicles. In January, the company announced that it will introduce all-electric versions of the popular F-Series pickup trucks by 2022.

Despite the drop in overall sales volume, the mix of existing truck and SUV models, along with recently launched technically-enhanced vehicles, are expected to drive Ford’s top line in first-quarter 2019. However, higher commodity costs, softening Asia and Europe markets, and ongoing restructuring operations are likely to hurt the bottom line.

Earnings Schedules of Other Major Auto Companies

Among other automotive companies, General Motors Company GM and Cummins Inc. CMI are scheduled to release first-quarter results on Apr 30, whereas Meritor, Inc. MTOR will report second-quarter fiscal 2019 earnings on May 1.

General Motors and Cummins currently carry a Zacks Rank #3 (Hold) while Meritor sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .

Long-term earnings growth rates for General Motors and Cummins are 8.5% and 9.3%, respectively. The earnings growth rate of Meritor for the current year is 10.9%.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>


Is your investment advisor fumbling your financial future?
See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.” Click to get your free report.

Ford Motor Company (F) : Free Stock Analysis Report

General Motors Company (GM) : Free Stock Analysis Report

Meritor, Inc. (MTOR) : Free Stock Analysis Report

Cummins Inc. (CMI) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research