Ford Motor Co. (NYSE: F | F Price Prediction) reported third-quarter 2019 results after markets closed Wednesday afternoon. For the quarter, the automaker posted adjusted diluted earnings per share (EPS) of $0.34 on revenues of $37 billion. In the same period a year ago, the company reported EPS of $0.29 on revenues of $37.69 billion. Analysts were looking for EPS of $0.26 and revenues of $33.98 billion.
Net income dipped from $1 billion in the third quarter of last year to $400 million. GAAP EPS dropped from $0.25 a year ago to $0.11, and net income margin fell to 1.1%, a drop of 1.5 percentage points year over year.
Earlier this month Ford reported third-quarter truck sales jumped 8.8% to 309,920 units and year-to-date truck sales are up 6.9% at 854,220 units. On the downside, sport utility vehicle sales tumbled 10.5% compared to the third quarter of last year, based on a drop of 13.2% in Ford-brand SUV sales and an increase of 19.2% in Lincoln-brand SUVs. Overall U.S. sales were down 4.9% year over year for the quarter and year-to-date sales are down 3.5% compared to the first nine months of 2018. Worldwide sales were down 8% in the quarter and down 11% for the first nine months of the year.
North American market share dipped 0.7 percentage points to 12.6% but revenue rose by 5%. The company said that adjusted EBIT rose by 8% to $1.8 billion in the quarter and that the improvement in operating results was due to mark-to-market investment gains, improvement in the North American, European, and China businesses, and a “strong performance” for Ford’s credit business.
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What Ford meant is that it could have been worse. And that’s what the firm is predicting for the fourth quarter. Higher warranty costs, higher-than-planned North American incentives, and lower volumes in China have led Ford to lower its full-year EBIT guidance to $6.5 to $7 billion, down from a second-quarter estimate of $7 to $7.5 billion. Last year, EBIT totaled $7 billion
The high end of full-year EPS guidance was lowered from a prior estimate of $1.35 to $1.32, still above the $1.30 the company posted last year.
CEO Jim Hackett said:
Our Global Redesign is about making choices to transform our organization, to become the world’s most trusted company and a clear leader in an era of rapid change. We are getting stronger today and we have more work to do.
Analysts have forecast adjusted EPS for the fourth quarter at $0.27 on revenue of $37.3 billion. For the full year, the consensus estimates call for EPS of $1.26 on revenue of $144.65 billion.
In after-hours trading Thursday, shares are getting pummeled, down about 2.5% at $8.98 in a 52-week range of $7.41 to $10.56. The consensus 12-month price target on the stock was $10.45 before the earnings report was released last night. The dividend yield on the stock is 6.62%. Investors must be wondering how much longer that can last (the company has already announced that it would pay its quarterly dividend of $0.15 for the fourth quarter).
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