Ford earnings: Will auto maker make even bigger investments in EVs? – MarketWatch

Ford Motor Co. is set to report quarterly earnings after the bell Thursday, the last of the major U.S. auto makers to give Wall Street an update on its finances and goals toward electrification and autonomous driving.

Ford’s
F,
-0.15%

electric-vehicle ramp has earned praise, with the auto maker unveiling electric versions of its top-selling F-150 pickup truck and Transit delivery van. Ford last month said it had to pause orders for its hybrid Maverick, a compact pickup truck, until the summer.

Wall Street will be looking forward to hearing more details about Ford’s EV ramp, and demand in general, said Bill Selesky, an analyst with Argus Research.

“We think that Ford stock hinges on how demand is trending. That should be the topic of conversation on Thursday night. We see demand as still being robust and we think that is the biggest factor in the conference call,” he told MarketWatch.

Ford may talk about investing more on its EV side, besides the $30 billion that the company has announced, he said, which would be “a big step and a positive one.”

Here’s what to expect:

Earnings: The FactSet consensus calls for Ford to report adjusted earnings of 45 cents for the quarter. That would compare with adjusted earnings of 34 cents a share in the fourth quarter of 2020.

Estimize, a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others, is expecting an adjusted profit of 50 cents a share for Ford.

Revenue: The analysts polled by FactSet are calling for sales of $41.2 billion for Ford, which would compare with $36 billion in the fourth quarter of 2020. Estimize is expecting $41.5 billion in revenue for the quarter.

Stock price: Ford shares have far outpaced the competitors’ and the broader index, gaining 87% in the past 12 months compared with gains of around 19% for the S&P 500 index.
SPX,
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What else to expect: Ford’s 2022 guidance will be a highlight, and Wall Street is likely to ask pointed questions about the potential for more investments in EVs and a possible factory reorganization to meet electrification goals.

Like General Motors Co.
GM,
-1.05%

and Tesla Inc.
TSLA,
-2.75%
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Ford will also have to update the Street on the impact of ongoing chip shortages and other supply-chain snags.

Ford was one of the auto makers hit the earliest by the chip shortage, Jessica Caldwell with Edmunds.com said.

The company showed “signs of stabilization” in the fourth quarter, and benefited from some of the fallout of its competitors with a big leap in market share, she said.

“The big question for 2022 is if the auto maker can keep up at this pace,” Caldwell said. “The F-150 Lightning arguably might be Ford’s most important vehicle launch of the decade, and there’s immense pressure on the auto maker to execute a flawless rollout. But that might be a tall order given the challenges presented by the supply chain over the last year.”

Ford might also talk about its investment in Rivian Automotive Inc.
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-7.61%

and any plans going forward. Ford last month said it was booking a $8.2 billion gain post Rivian’s initial public offering.

Compared with GM, which reported fourth-quarter results late Tuesday, “Ford has more positive momentum” following a quarter in which its U.S. sales volume declined only 6.3% on-year, compared with a 42.9% decline for GM, CFRA’s analyst Garrett Nelson said.

“Ford is also coming off a year in which it became the second bestselling EV manufacturer in the U.S. behind Tesla, with Mustang Mach-E sales of more than 27,000 units,” he said.

The company announced early Wednesday that January U.S. EV sales rose 167% to 13,169 vehicles, which represented 9.2% of the total U.S. vehicles sold for the month.

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