Ford Motor announced worse-than-expected second-quarter earnings on Wednesday. Revenue met expectations. The auto giant continues to predict a full-year loss of around $5 billion for its electrical vehicle business amid continued pricing pressure and investments in next-generation EVs. Shares of Ford sank Thursday.
Ford reported that Q2 EPS came in at 47 cents, down 35% compared to a year ago. Meanwhile, quarterly revenue increased 6% to $47.8 billion. Ahead of earnings, analyst consensus had Ford earnings of 68 cents per share and sales totaling $47.79 billion, according to FactSet.
The company also announced its 2024 adjusted EBIT view of $10 billion-$12 billion is unchanged while raising its adjusted free cash flow outlook by $1 billion to between $7.5 billion and $8.5 billion.
Meanwhile Ford also continues to anticipate a full-year loss of $5 billion-$5.5 billion for its EV segment.
Ford stock plunged 18.4% to 11.16 during market action on Thursday, after declining 1.2% to 13.67 on Wednesday. Before the Q2 earnings release, Ford stock traded just below a 13.95 buy point from a cup-with-handle base. Shares broke out on July 12, then hit a 52-week high of 14.85 intraday on July 18 before pulling back.
Ford's second-quarter earnings results come after General Motors reported better-than-expected earnings and sales early Tuesday amid robust truck sales and record EV sales.
GM also increased its full-year outlook, expecting 2024 adjusted EPS of $9.50-$10 and adjusted EBITS of $13 billion-$15 billion, up from $9-$10 and $12.5 billion-$14.5 billion, respectively. Analysts had forecast 2024 EPS of $9.45.
Tesla also reported mixed Q2 earnings and revenue on Tuesday, with quarterly EPS sinking more than 40%.
Rising expectations for a Fed rate cut later this year have been bolstering automakers. Lower rates on car loans would make repayments easier for consumers, propping demand.
Overall, U.S. new vehicle sales nudged up a fraction in Q2 vs. a year ago as high interest rates and still-high vehicle prices continue to keep car buyers on the sidelines.
Ford Earnings: Auto Sales On The Rise
In early July, Ford and General Motors reported that U.S. auto sales grew slightly in the second quarter, despite headwinds.
Both the carmakers saw EV sales surge in Q2, a hopeful sign that production of newer electric vehicles may be ramping up after supply issues. Ford also reported record quarterly sales of hybrid vehicles.
Ford sold 536,050 vehicles in Q2, up slightly less than 1%. However, in the first six months of the year, Ford's sales rose 3.6% to more than 1 million units, with gains across trucks, SUVs and cars.
In Q2, sales of Ford vehicles with internal combustion engines tumbled 5%. They slid 1.4% in the first half of 2024, dragged lower by the F-series trucks. Meanwhile, Ford's EV sales vaulted 61% in Q2 to 23,957, led by the Mustang Mach-E, Ford's answer to the Tesla Model Y.
Ford's EV sales are a small but growing part of its business, at 4% of total sales in the first half of 2024.
The auto company also saw sales of hybrid vehicles jump 56% to a record 53,822, led by the Maverick mid-size truck.
However, Ford's F-series trucks saw a further 6% sales decline in Q2. The F-series trucks are Ford's top seller by far — and the company's profit center.
Ford hopes to stem the sales decline with a new F-150 model, which went on sale in March. In Q2, the F-series trucks saw a smaller drop than Q1's 10% decline.
Ford stock ranks fourth in the 35-member IBD Auto Manufacturers industry group. The stock has a 76 Composite Rating out of a best-possible 99. Shares have a 64 Relative Strength Rating and a 66 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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