Will Ford Blue Segment Sales Aid Ford (F) in Q2 Earnings?
Ford Motor Company F is set to release its second-quarter 2023 results on Jul 27, after the closing bell. The focal point of the auto manufacturer’s earnings release will be its global wholesale volume.
(Also Read: Ford (F) Gears up to Report Q2 Earnings: Here’s What to Expect)
Q1 Highlights
In the last reported quarter, Ford delivered earnings of 63 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents. The bottom line also rose compared with the year-ago earnings of 38 cents per share. Total revenues came in at $41,474 million and witnessed year-over-year growth of 20.3%.
In the first quarter, total wholesale volume in the Ford Blue and Ford Pro segments increased 6% year over year to 706,000 and 18% year over year to 337,000, respectively, whereas the same for the Ford Model e segment decreased 32% year over year to 12,000.
Ford reported an adjusted free cash flow of $693 million during the quarter. It had cash and cash equivalents of $22,144 million as of Mar 31, 2023 compared with $25,134 million on Dec 31, 2022. The automotive long-term debt decreased to $19.1 billion from $19.2 billion as of 2022-end.
Factors at Play
Ford recorded vehicle sales growth of 11.2% in the United States during the second quarter of 2023. Once again, the F-Series became America’s top-selling truck, with a 34% rise in sales in the quarter under discussion. During the second quarter, sales of Ford Blue’s new Escape went up by 28.7%, whereas sales of its Maverick grew by 7.7%. Sales of Ford Blue’s new Lincoln Corsair climbed 27% in June to end the quarter.
For the second quarter, we expect Ford Blue's wholesale volume to be around 720,000, up 7.5% year over year. We estimate second-quarter Ford Blue sales to be around $24,061 million, up from $23,834 reported in the corresponding quarter of 2022. While we expect sales from the Ford Blue segment to buoy the company's results, our estimate for the segment's adjusted EBIT suggests a 27.7% decline year over year to $1,811.6 million owing to cost headwinds.
What Does Our Model Say?
Our proven model predicts an earnings beat for Ford as it has the right combination of a positive Earnings ESP and a favorable Zacks Rank. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
The company has an Earnings ESP of +6.43%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ford currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 50 cents per share, indicating a decline of 26.47% on a year-over-year basis. The consensus mark has moved north by 2 cents in the past seven days. The Zacks Consensus Estimate of $39.78 billion for sales indicates a 4.94% rise on a year-over-year basis.
Other Stocks With the Favorable Combination
Here are a few more players from the auto space that, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Oshkosh Corporation OSK will release second-quarter 2023 results on Aug 1. The company has an Earnings ESP of +10.58% and sports a Zacks Rank #2.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at $1.62 per share and $2.24 billion, respectively. OSK surpassed earnings estimates once in the trailing four quarters and missed three times, the average negative surprise being 4.37%.
Lear Corporation LEA will release second-quarter 2023 results on Aug 1. The company has an Earnings ESP of +2.89% and a Zacks Rank #2.
The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $3.15 per share and $5.79 billion, respectively. LEA surpassed earnings estimates in all the trailing four quarters, the average surprise being 15.53%.
Magna International MGA will release second-quarter 2023 results on Aug 4. The company has an Earnings ESP of +1.06% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Magna’s to-be-reported quarter’s earnings and revenues is pegged at $1.25 per share and $10.20 billion, respectively. MGA surpassed earnings estimates in one of the trailing four quarters and missed thrice, the average negative surprise being 6.46%.
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Ford Motor Company (F) : Free Stock Analysis Report
Magna International Inc. (MGA) : Free Stock Analysis Report
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Oshkosh Corporation (OSK) : Free Stock Analysis Report
