Ford Stock Plunges Almost 20% on Earnings

By Douglas A. McIntyre Published Jul 26, 6:40AM EDT

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Ford Stock Plunges Almost 20% on Earnings — © solarseven / iStock via Getty Images

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Ford Motor Co. (NYSE: F | F Price Prediction) stock retreated nearly 20% following its earnings report.
High warranty expenses and losses on EVs troubled investors.
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Ford Motor Co. (NYSE: F) earnings upset Wall Street. The day after they were released, the stock was down 19% at one point, and it closed down just over 18%. It was an extraordinary crash for a public corporation whose earnings initially seemed reasonably good. The plunge was the worst since 2008.

What happened? Ford posted an earnings drop of 26% from the same quarter in 2023. Earnings for the recent quarter totaled $2.8 billion. Unfortunately, analysts expected the figure to be $3.7 billion.

Investors were troubled by high warranty expenses. Ford Blue, the division that makes gasoline-powered cars, had an operating income of $1.2 billion. Warranty expenses for the quarter were $2 billion, which was $800 million worse than the prior quarter. “Warranty has been a growing issue at Ford over the last five years and has escalated over the past year,” Freedom Capital Markets analyst Mike Ward wrote in a report on the numbers.

Another deeply troubling development was that Ford Model e, the electric vehicle (EV) part of the company’s operations, lost $1.1 billion. That shows how badly Ford’s investment in this sector has gone. EV rival Tesla had a weak second quarter but had a net income of $1.5 billion.

Why did Ford’s stock drop even though it had reasonable profits? Everything else about the company’s numbers was awful.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.