Will lower sales in North America affect Ford (F) third quarter results? – October 25, 2021


Ford‘s (F Free Report) third quarter 2021 results are likely to have been impacted by tanker sales in North America, the company’s largest market. The company is expected to release its quarterly results on October 27 after the closing bell.

(Read also: Main factors influencing Ford’s earnings this season)

Second Quarter Highlights for Ford’s North American Market

In the most recently published quarter, wholesale unit volumes in the North American segment totaled 327,000, up from 272,000 units reported in the prior year period. Revenue for the North American segment reached $ 15 billion, indicating a 37% year-over-year jump. EBIT totaled $ 194 million, compared to a loss of $ 974 million recorded in the corresponding quarter of 2020, driven by a favorable pricing strategy and product mix.

North American market to hurt Ford’s third quarter results

Amid the global semiconductor shortage facing the auto industry, Ford’s third-quarter results were likely battered by falling vehicle sales, particularly in North America.

Notably, during the third quarter, the company recorded total sales of 400,843 units in the North American market, down 27.4% year-over-year. While sales of the namesake brand fell 26.7%, those of the Lincoln brand fell to 17,038 units from 27,554 units in the previous year’s quarter.

In addition, total truck sales for the quarter were 229,738 units, down from 311,751 units in the previous year quarter. In fact, sales of the best-selling truck in the United States, the Ford F-Series, totaled 172,799 vehicles in the third quarter, dropping 22% year-on-year. Additionally, SUV demand fell 15.8% to 161,571 in the third quarter. Highlights for Ford’s SUVs during the quarter include year-over-year declines in Explorer and Expedition. Explorer sales fell 26.4%, 56.9% and 5.3% year-on-year, respectively, for the months of July, August and September, while Expedition sales were down 6 , 8%, 12.4% and 20.9% year-on-year, respectively.

Demand for passenger cars fell 80.2% year-over-year to 9,534 units in the quarter, mainly due to lower sales of Fusion, Mustang and GT models.

Therefore, Zacks’ consensus estimate for quarterly revenue for the North American region is set at $ 23,073 million, which indicates a decline from last year’s figure of $ 25,300 million. In addition, the consensus mark for wholesale unit volumes in the North American segment is set at 548,000 for the quarter under discussion, indicating a decrease from the 651,000 units reported during the period of the year. former. In addition, the consensus estimate for segment EBIT is set at $ 1,743 million, calling for a 45.2% year-over-year decline.

On a positive note, the company’s electrified vehicle (EV) portfolio continues to attract new customers to the brand at a higher rate during the quarter. In fact, Ford’s electrified vehicle sales for the months of July, August and September were 9,103, 8,756 and 9,150, respectively, reflecting an increase of 57.5%, 67.3% and 91.6 %.

So while electric vehicle sales remained strong in the quarter, lower overall vehicle deliveries are likely to have weakened the company’s performance in the third quarter.

Ford’s Overall Profits and Revenue Projections for the Third Quarter

Zacks’ consensus estimate for Ford’s third-quarter earnings is set at 29 cents per share, suggesting a decline of 55.38% year-over-year. In addition, Zacks’ consensus estimate for quarterly sales of $ 34.23 billion predicts a 1.37% year-over-year decline.

Investors should note that our proven model does not predict conclusive gains for Ford this season. The combination of a positive earnings ESP and a Zacks # 1 (strong buy), 2 (buy), or 3 (hold) ranking increases the odds of beating the winnings.

You can discover the best stocks to buy or sell before they are flagged with our ESP Earnings Filter.

Ford – which shares space with major automakers including General Motors (DG Free report), Stellantis (STLA Free report) and Toyota (MT Free Report) – currently has a Zacks Rank # 4 (Sell).

You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.

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