Ford Looks to New Models and China To Get Sales Out of a Stall

July 23, 2014 12:49 PM

Ford Motor Co. (F) is set to report FQ2 2014 earnings before the market opens on Thursday, July 24th.  Legendary American automotive giant Ford is going to be looking to the other side of the world for a boost this quarter. Ford’s earnings are expected to be down at least 10% this problem due to a variety of problems. On the bright side, sales in China popped up 35% in the first half of the year and the automaker expects to roll out a small army of 23 new models in 2014. Here’s what to look for from Thursday’s report.

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This quarter 44 contributing analysts on Estimize.com have come to a consensus earnings expectation of 40c EPS and $36.703B in revenue compared to a consensus of 37c EPS and $36.707B from Wall Street. Over the previous 6 quarters the consensus from Estimize.com has been more accurate than Wall Street in forecasting Ford’s EPS and revenue 5 and 4 times repsectively.

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Up until last quarter Ford’s fundamentals were on a great run. The American car maker had beaten the Wall Street consensus on the top and bottom line for 5 quarters in a row until April, when the company inexplicably missed even the lowest estimate from the sell-side on both EPS and revenue.

Last quarter Ford reported losses in Europe and South America, but higher sales volume in the Asia Pacific region which were bolstered by record share in China. Projected economic growth of slightly below 7.5% in China has Ford optimistic that car sales will continue to expand in the world’s most populous country as a middle class continues to emerge there. In Ford’s previous earnings report the company cited a rocky start to the year in the Americas, but noted that sales had been picking up just before its April report. Sales in the Euro Area are expected to remain sluggish on weak economic growth.

 

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Estimize.com ranks and allows the sorting of analysts by accuracy, the analyst with the lowest error rate on Ford is a healthcare professional who goes by the username ILL_NOIS. Over 2 previously scored estimates on Ford ILL_NOIS has averaged an error rate of 2.3%. ILL_NOIS has only made 3 scored estimates on the platform, but has been more accurate than Wall Street in predicting EPS and revenue 100% of the time. ILL_NOIS’s impressive automotive estimates have him ranked 517th overall among over 4,700 contributing analysts. Estimize is completely open and free for anyone to contribute, and the base of contributing analysts on the platform includes hedge fund analysts, asset managers, independent research shops, non professional investors, and students.

The Estimize consensus was more accurate than the Wall Street consensus 65% of the time last quarter on the coverage of nearly 1000 stocks. A combination of algorithms ensures that the data is not only clean and free from people attempting to game the system, but also weighs past performance and many other factors to gauge future accuracy.

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Contributing analysts on the Estimize.com platform are forecasting that on Thursday Ford will report earnings 3c per share ahead of Wall Street’s EPS forecast and miss the Street’s revenue consensus by $4 million (<1%). There has been some mixed economic data in the US, but preliminary auto-sales numbers from June indicate that Ford sold slightly more vehicles than expected. Although June sales were down 5.8%, that’s still better than the 6.6% drop that was forecasted. On Thursday we’ll see if Ford’s auto sales in the US have any horsepower and we’ll look to the Asia Pacific region for continued strength there, particularly in China.

Head over to Estimize.com/calendar to follow the most comprehensive earnings season calendar on the web featuring consensus estimates from Wall Street and the Estimize community.

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