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Ford (F) Q1 Earnings Lag Estimates, Revenues Shrink Y/Y

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Ford Motor F reported adjusted earnings of 38 cents per share in first-quarter 2022, missing the Zacks Consensus Estimate of 39 cents. Lower-than-expected profits in North America and a wider-than-expected pretax loss in China led to this underperformance. The bottom line compares unfavorably with the year-ago quarter’s earnings of 89 cents. The company’s consolidated first-quarter revenues came in at $34.5 billion, down 4.9% year over year.

Ford Motor Company Price, Consensus and EPS Surprise

Ford Motor Company Price, Consensus and EPS Surprise
Ford Motor Company Price, Consensus and EPS Surprise

Ford Motor Company price-consensus-eps-surprise-chart | Ford Motor Company Quote

Segmental Performance

In the first quarter, the total wholesale volume in the Ford Automotive segment fell 9% year over year to 966,000 units. Revenues from the segment declined 4% to $32.1 billion and missed the Zacks Consensus estimate of $39.1 billion. Earnings before interest and taxes came in at $1,891 million against the year-ago loss of $1,506 million.

In North America, revenues fell 3% year over year to $22.3 billion in the reported quarter. The wholesale volume declined 4% to 514,000 units. EBIT totaled $1,591 million, lower than $2,949 million in the corresponding quarter of 2021. The figure also lagged the consensus mark of $2,191.

In South America, revenues moved up 33% year over year to $0.6 billion in the quarter. Wholesale volume plunged 14% to 15,000 units. The unit’s pretax earnings increased to $50 million from a loss of $73 million reported in the prior-year quarter amid cost-cut and rejig efforts. The consensus mark was pegged at a loss of $78 million.

In Europe, revenues declined 2% year over year to $6.9 billion in the quarter. Wholesale volume slid 9% to 254,000 units. Pretax earnings for the segment totaled $207 million, falling from $341 million, but the reported EBIT beat the consensus mark of a loss of $35.6 million.

In China, revenues plummeted 32% year over year to $0.6 billion in the reported quarter. Wholesale volume dipped 15% to 128,000 units. Moreover, the pretax loss widened from the prior year’s loss of $15 million to $53 million. The metric was also wider than the consensus mark of a loss of $49.6 million.

In the International Markets Group, revenues were down 23% from the year-ago figure to $1.7 billion. Wholesale volume slid 33% to 55,000 units and pretax earnings totaled $96 million, falling from $201 million reported in the year-ago period. The figure lagged the consensus metric of $129 million.

First-quarter revenues from the Ford Credit unit came in at $2,281 million, lower than the year-ago revenues of $2,663 million and missing the Zacks Consensus Estimate of $2,636 million. Pretax earnings totaled $928 million, beating the consensus mark of $837 million.

Revenues from Ford Mobility came in at $84 million, surging from the year-earlier level of $11 million.

Financial Position

Ford reported a negative adjusted free cash flow (FCF) of $580 million during the quarter. It had cash and cash equivalents of $10,579 million as of Mar 31, 2022, compared with $10,963 million on Dec 31, 2021. The automotive long-term debt decreased to $17,158 million from $17,200 million as of the end of 2021.

Guidance

Ford’s 2022 projections remain unchanged. Adjusted EBIT for 2022 is between $11.5 billion and $12.5 billion, implying an uptick of 15-25% from the 2021 level. Moreover, 2022 vehicle wholesale volumes are anticipated to jump 10% to 15%. Adjusted FCF is envisioned in the range of $5.5-6.5 billion for 2022, suggesting a jump from $4.6 billion recorded in 2021.

Zacks Rank & Key Picks

F currently carries a Zacks Rank #3 (Hold).

Better-ranked players in the auto space include BRP Group, Inc. DOOO, sporting a Zacks Rank #1 (Strong Buy) and Dorman Products DORM and Standard Motor Products SMP, each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP Group has an expected earnings growth rate of 9.1% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.9% upward in the past 60 days.

BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 13.4% over the past year.

Dorman Products has an expected earnings growth rate of 18.32% for the current year. The Zacks Consensus Estimate for current-year earnings has been marginally revised 0.4% upward in the past 60 days.

Dorman Products’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. DORM pulled off a trailing four-quarter earnings surprise of 3.1%, on average. The stock has lost 4.4% over the past year.

The Zacks Consensus Estimate for Standard Motor’s current-year earnings has been revised around 1.1% upward in the past 60 days.

Standard Motor’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 60.5%, on average. The stock has declined 1.8% over the past year.


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