Ford Motor Co. is scheduled to release fourth-quarter results on Thursday, before the opening bell.
has a perennial ace up its sales sleeve: its iconic (and redesigned for the 2015 model year) F-150 pickup, the No. 1 vehicle sold in the U.S. Ford also announced earlier this year it will bring back its Bronco sport-utility vehicle (SUV) and Ranger pickup, further widening its offerings.
Six out of 10 vehicles sold in the U.S. last year were pickup trucks or SUVs, a buyers’ preference that shows no sign of waning.
Ford is also in the good graces of the Trump administration. Under criticism from then President-elect Donald Trump, the auto maker scrapped plans to build a $1.6 billion new plant in Mexico, keeping production of some of its small cars at an existing factory in Mexico, and announced plans to invest $700 million in a Michigan facility that will make electric vehicles.
Not all is positive, however. Ford last week announced plans to take a $3 billion pretax charge against fourth-quarter earnings following accounting changes related to its pension plans. The charge was expected. In addition, the demand for cars continues to wane, in favor of SUVs.
Here’s what to expect from Ford earnings:
Earnings: Analysts polled by FactSet expect, on average, Ford to report fourth-quarter earnings of 33 cents a share, which would compare with 58 cents a share in the year-ago period.
The past quarters have been a little bit of a mixed bag for Ford, as the company beat expectations in three out of last five quarters (it missed second-quarter 2016 and third-quarter 2015 forecasts; the latter by a penny).
Estimize, which crowdsources estimates from Wall Street analysts, buy-side analysts, hedge-fund managers, company executives, academics and others, has a consensus earnings estimate of 37 cents a share based on 65 estimates.
Revenue: The FactSet sales consensus is $34.86 billion, which would compare with sales of $37.90 billion a year ago.
Estimize projected sales of $35.33 billion for the car maker.
Stock price: Shares of Ford have gained 1.1% in the past 12 months, a far cry from gains of nearly 19% for the S&P 500 index
in the same period.
The Ford shares also underperformed the index on a three-month basis, up 2.1% compared with a gain of 5.6% for the S&P 500.
Other issues: Ford’s quarterly guidance (flat vehicle revenue and pretax profit and per-share earnings down year-over-year) is “notably cautious” compared with peers, and the company appears to be building cash reserves to be more prepared for a downturn, analysts at Goldman Sachs said in a recent note to clients.
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The company’s investments in driverless-car technology and shared mobility are some of Ford’s “near-term profitability headwinds,” the Goldman analysts said. The overall sentiment toward the stock is “apathy,” they said.
“We believe [original equipment manufacturers] remain out of favor in the unloved auto sector and given the cautious, but fair tone, investors mainly have questions on its peer. In that vein, the most frequently asked question is why Ford and (General Motors Co.) have vastly different views on the industry and their profitability,” they said.
scheduled to report fourth-quarter results in early February, has called for an increase in revenue and an additional $5 billion share buyback program. Despite the upbeat tone, investors questioned GM’s ability to drive pricing higher in the U.S. and grow market share, the Goldman analysts said.
Efraim Levy, an analyst with CFRA, said he’d be interested in hearing details about Ford’s regional performance, especially sales in China and in Europe.
Ford’s sales in China rose 14% in 2016, selling a record 1.27 million vehicles in that country, and sales in Europe rose 5% in 2016.