Ford Motor Co (FMC1.DU)

Ford stock falls as guidance disappointment overshadows sales beat

Ford (F) shares are declining in extended-hours trading after the automaker’s outlook came in on the low end of its forecast, overshadowing its revenue beat. The results come after General Motors (GM) delivered an earnings beat and a guidance raise last week. S&P Global Ratings autos managing director Nishit Madlani joins Josh Lipton and Josh Schafer on Market Domination Overtime to break down the results and what they mean for Ford going forward. Madlani says, “From a credit ratings perspective, we currently have a stable outlook. And that hinges a lot on cost improvements that we were expecting over the next 12 to 18 months. We had lowered our margin forecast in the summer so that narrowed the cushion for any significant underperformance. So the numbers that you know came in earlier today at the lower end of their range. It doesn't inspire too much confidence. But we had already baked that in our lowered forecasts.” On electric vehicles (EVs), the analyst says he expects “a slowdown,” though he notes this weakness isn’t Ford-specific, “That's consistent with what we've been hearing from multiple players in the industry [in the] short term.” The silver lining in the EV slowdown is that “they can sell more of their more profitable vehicles,” but “it does mean that there are costs that need to be spent because they have had changes in strategy as far as certain products that had to be rolled back.” The analyst says the traditional automakers’ struggles with EVs have raised some more long-term questions about strategy. “It's going to take a while. They've already delayed some of the [capital spending] plans. I mean, Ford, specifically, has made changes. They've basically canceled the all-electric three-row SUV and want to only make a hybrid one now.” He notes that pricing will probably be the next biggest headwind for traditional automakers trying to make a profit from their EV businesses. For more on Madlani’s perspective on Ford earnings and what it signals about the broader US auto market, watch the video above. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. This post was written by Naomi Buchanan.

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  Ford beats on Q3 revenue, sees profit decline from last year

  Yahoo Finance Video
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  Ford stock falls despite Q3 sales beat, as it guides to lower end of 2024 profit forecast

  Yahoo Finance

Ford earnings: This is the elephant in the room for automaker

Ford (F) is set to report its third quarter earnings after Monday's closing bell, and Autolist editor-in-chief David Undercoffler joins Seana Smith on Catalysts to discuss what investors can expect. While demand for electric vehicles has been sluggish, Undercoffler believes that it won't be a "make-or-break case" in Ford's earnings. Rather, he argues that "the elephant in the room is quality control": "They have got to get warranty costs and recall costs under control. They recalled the most number of vehicles in 2022. They were almost number one in 2023, they're second so far this year. Last year, Bloomberg estimated that recall costs were $4.8 billion. For Ford, that's huge amounts of money... Q2 warranty costs were $2.3 billion for Ford. So these are sort of unforced errors that they've really got to get under control before they can sort of look at anything else." Undercoffler adds that Ford CEO Jim Farley is in a difficult position, noting that efforts to address these issues could take months or years to materialize: "We're talking about changing or adapting your manufacturing processes, your quality control. So it could be a while." However, it's not all bad news for Ford. Undercoffler notes that its fleet and commercial division performs well, and that the Ford Credit financial services segment has good profit margins. "In terms of the products themselves, there are definitely some highlights. The Ford Ranger is all new, that's sort of an affordable, higher volume. The Ford Explorer has been refreshed, that's going on sale right now. They just introduced the new Ford Expedition that will go on sale, that's a fatter margin on that vehicle — completely been redesigned. So there are bright spots for sure." Catch Morningstar US autos equity strategist David Whiston explain to Yahoo Finance why General Motors (GM) continues to outperform Ford. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. This post was written by Melanie Riehl