Ford Earns 52 Cents per Share for Q2

Ford Motor (F) had a disappointing earnings report for Q2. The automaker earned 52 cents per share which was eight cents below expectations.

But what really troubles investors was Ford’s cautious outlook for the rest of the year. Officially, the company is standing by its previous guidance for this year, but it now notes that there are risks.

“We’re committed to meeting our guidance, but it is at risk,” Chief Financial Officer Bob Shanks told reporters Thursday. The company now says it’s unlikely that U.S. vehicle sales will break last year’s record, and Shanks predicted further contraction in 2017. “We don’t see growth, at least in the near term.”

After a record streak of six straight years of annual U.S. auto-sales growth, Ford is joining analysts who are skeptical that the record set in 2015 will be topped this year. Consumer demand has gone slack, forcing automakers to dial up deals to lure buyers to showrooms. For the first six months, industrywide light vehicle sales rose just 1.5 percent while incentives jumped 13 percent, according to researcher Autodata Corp.


The U.S. auto market slowed sooner than Ford anticipated, Shanks said. The automaker now sees U.S. auto sales of 17.4 million to 17.9 million vehicles, down from an earlier forecast of about 18 million. Excluding medium and heavy trucks, the new projection translates to a light-vehicle market of 17.1 million to 17.6 million, compared with last year’s record 17.5 million.

“We do think the U.S. is coming down from what we expected,” Shanks said. “We saw higher U.S. incentives — that was for the industry and for us. The industry increased and we increased in line with the industry.”

The shares are currently down over 9%.

Posted by on July 28th, 2016 at 10:54 am

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.