Key Takeaways
- Analysts estimation adjusted EPS of $0.26 vs. $0.65 for Q3 FY 2020.
- Ford North American car income are expected to diminution YOY.
- Companywide gross is estimated to diminution somewhat YOY amid planetary proviso concatenation issues and accumulation problems.
Ford Motor Co.'s (F) is undergoing a large translation nether Chief Executive Officer (CEO) Jim Farley, trimming operations successful immoderate areas portion expanding successful others. Ford precocious announced that it would instrumentality $2 cardinal successful charges and unopen its factories successful India, which it erstwhile saw arsenic a imaginable apical market. Also, Ford staged a large coup erstwhile it precocious hired the caput of Apple Inc.'s (AAPL) car project, advancing Ford's $22 cardinal program for caller car technologies, including electrical conveyance offerings.
Investors volition absorption connected the semipermanent interaction of these developments, arsenic good arsenic the short-term interaction of the planetary semiconductor shortage, erstwhile Ford reports net aft the marketplace adjacent connected Oct. 27, 2021 for Q3 FY 2020. Investors whitethorn spot signs for caution. Analysts expect the institution to study a steep diminution successful adjusted net per stock (EPS) and a flimsy YOY driblet successful revenue.
Investors besides volition absorption connected a cardinal Ford metric, North American car sales. North America is Ford's largest and astir profitable market, and this metric is an important indicator of however Ford has kept up with expanding car request arsenic the pandemic has waned. In Q3 FY 2021, analysts estimation that North American cars fell sharply aft rebounding successful Q2.
Ford shares struggled to support maturation comparative to the broader marketplace successful the past 2 months of 2020, pulling up of the S&P 500 successful November but past dipping beneath astir the commencement of 2021. Since aboriginal successful January, though, Ford banal has staged a important rally, climbing to an archetypal precocious successful June 2021 and past topping that with a caller precocious successful October. The banal has provided a 1-year trailing full instrumentality of 99.3%, acold up of 34.3% for the S&P 500.
Ford Earnings History
Ford's wide show has been volatile owed to the COVID-19 pandemic and accumulation disruptions related to the planetary semiconductor shortage. The institution posted 2 quarters of adjusted losses per share, successful Q1 and Q2 FY 2020, earlier returning to affirmative adjusted EPS successful Q3 FY 2020. The archetypal rebound successful adjusted EPS was sizable, with Ford reporting 4 consecutive quarters of affirmative adjusted EPS from Q3 FY 2020 done Q2 FY 2021. But that whitethorn alteration dramatically successful Q3 FY 2021. Analysts estimation that adjusted EPS volition plunge 60.2% YOY.
Ford besides has faced a large situation successful increasing gross successful caller years. The institution reported six consecutive quarters of YOY gross declines from Q1 FY 2019 done Q2 FY 2020, past different YOY diminution successful Q4 FY 2020. This inclination reversed the archetypal 2 quarters of this year, particularly successful Q2 erstwhile Ford reported a 38.1% summation successful revenue. But for Q3 FY 2021, analysts expect a 2.3% YOY diminution successful revenue.
| Estimate for Q3 FY 2021 | Q3 FY 2020 | Q3 FY 2019 | |
| Adjusted Earnings Per Share | $0.26 | $0.65 | $0.34 |
| Revenue (B) | $36.6 | $37.5 | $37.0 |
| North American Cars Sold | 568.5K | 651.0K | 639.0K |
Source: Visible Alpha
The Key Metric
As mentioned, investors besides volition intimately ticker Ford's full North American car sales. Demand for cars successful North America has surged arsenic the portion has emerged from the worst of the COVID-19 pandemic. As mentioned, different large contented has been proviso concatenation issues successful caller months, and automakers are utilizing semiconductors successful their vehicles much than ever before. The planetary semiconductor shortage has halted oregon delayed car production, forcing Ford and different automakers to conflict to support up with demand. Because North America is Ford's superior market, the company's occurrence astatine matching car request successful this country is simply a beardown indicator of its wide capableness arsenic the broader system continues to retrieve from the pandemic.
Unfortunately, expert estimates for Ford's North American cars sold successful Q3 FY 2021 are not promising. They estimation that Ford volition study a 12.7% YOY diminution pursuing 20.2% YOY maturation successful Q2. Including Q2, Ford has reported rising North American cars income successful lone 4 of the past 18 quarters backmost to Q1 FY 2017. The estimated diminution successful Q3 FY 2021 would beryllium the smallest income diminution since aboriginal 2020. But it suggests that the economical disruption related to the pandemic, including proviso concatenation challenges, proceed to measurement connected Ford's performance.
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