Ford (F) Up 4.6% Since Last Earnings Report: Can It Continue?

Zacks Equity Research
Exxon Mobil (XOM) closed the most recent trading day at $75.05, moving +0.94% from the previous trading session.

It has been about a month since the last earnings report for Ford (F). Shares have added about 4.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Ford due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Ford Earnings & Revenues Drive Past Estimates in Q1

Ford reported first-quarter 2019 adjusted earnings per share of 44 cents, beating the Zacks Consensus Estimate of 26 cents. In the prior-year quarter, adjusted earnings were 43 cents per share. Results were impacted by the exit of heavy truck operation in South America and restructuring of the company’s joint venture in Russia, offset by robust performance in North America and at Ford Credit.

Adjusted earnings before income and taxes (EBIT) in the first quarter were$2.4 billion, reflecting an increase of $0.3 billion from the year-ago quarter.

During the reported quarter, Ford logged automotive revenues of $37.2 billion, surpassing the ZacksConsensus Estimate of $36.4 billion. In the prior-year quarter, the figure was $39 billion.

Ford Automotive

During the reported quarter, wholesale volume at the Ford Automotive segment declined 237,000 units to 1.43 million. EBIT was $2 billion, marking a decline of $0.3 billion from the year-ago quarter.

In North America, revenues increased $0.6 billion year over year to $25.4 billion during the reported quarter. Wholesale volume declined 43,000 units to 753,000. Further, EBIT was $2.2 billion, marking rise of $0.3 billion from the year-ago quarter. Thisrise was majorly due to stronger net pricing and product mix.

In South America, revenues declined$0.4 billion year over year to $0.9 billion. Pre-tax loss amounted to $158 million, owing to inflationary and adverse exchange effects. Moreover, wholesale volume declined by 18,000 units to 68,000.

In Europe, revenues decreased $1.3 billion to $7.6 billion. Wholesale volume decreased 58,000 units to around 391,000. The region’s EBIT was$57 million, marking a decline of $62 million in the first quarter of 2018.

In the Middle East & Africa segment, revenues were $0.6 billion. Further, wholesale volume declined 3,000 units to 22,000. The region recorded an EBIT of $14 million.

In the Asia Pacific region, excluding China, revenues decreased $0.3 billion to $1.8 billion. Wholesale volume declined 8,000 units to 76,000. Further, the region recorded an EBIT of$19 million.

In China, revenues declined $0.4 billion year over year to $0.9 billion. Further, the company incurred pre-tax loss of $128 million in that country. This decline was due to lower volume, partly offset by the company’s cost-reduction actions.

Other Segments

Ford has two other segments namely, Ford Credit and Mobility. During the first quarter, Ford Credit generated EBT of $801 million. The Mobility segment had pre-tax loss of $288 million due to increased investment in the development of mobility services and the autonomous vehicle business.

Financial Position

Ford had cash and cash equivalents of $20.8 billion as of Mar 31, 2019, compared with $16.7 billion as of Dec 31, 2018.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 10.74% due to these changes.

VGM Scores

At this time, Ford has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Ford has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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