How Is The Ford (F) North America Unit Positioned Prior To Q4 Earnings?

On February 2, 2022, after the market has closed, Ford F is going to reveal the results for the fourth quarter of 2022. It is important to examine the company’s sales in the United States during the quarter that will be reported, especially since the earnings report is just around the horizon. In addition to this, we will go over the most important forecasts for the company’s North American market, which is responsible for the majority of automobile sales.

Ford’s North American Market in Q3: High Points

Wholesale unit volumes in the North American segment increased by 4% compared to the same time a year earlier, reaching 568,000 units in the most recent reported quarter. However, this figure fell short of the consensus estimate of 627,000 units. The North American division reported a year-over-year increase in revenues of 10% to $26.3 billion in the most recent reported quarter, which was below the consensus figure of $27.6 billion.

As a consequence of this, the EBIT came to a total of $1,309 million, representing a reduction from the $2,423 million recorded in the same quarter of 2021. Additionally, the result fell short of the expected total of $1,955 million.

Things to Keep in Mind This Time

Ford sold 483,970 cars in the United States in the fourth quarter, which was more than 4% less than the same time last year. During the fourth quarter of 2022, sales of SUVs went down by about 11%, but sales of trucks went up by 0.6%, to 270,064 units. It’s important to know that Ford sells more trucks than any other type of car, and that trucks also bring in the most money for the auto giant. The best month for sales of F-series trucks in 2022 was December. Last month, Ford sold 75,076 F-Series cars.

This is a good sign for the North America unit’s sales in the fourth quarter. During the quarter under review, sales of the Maverick truck jumped to 22,568 units. In the fourth quarter of 2022, Ford sold 20,339 electric vehicles (EVs), which included the Mustang Mach E, the E-Transit, and the F-150 Lightning. Not only have the volumes gone up year over year, but they have also gone up 11.4% from one year to the next.

The Zacks Consensus Estimate for wholesale volumes in North America is 660,000 units, which is more than the 599,000 units in the same time last year. So, the general estimate for sales in North America is $28.8 million, which means an increase of 11.6% from last year.

Even though the company is having a hard time because of rising inflation and supply chain problems that are making commodity costs go up, high vehicle prices are helping. Ford is raising prices to make up for the rising costs of making cars. The company raised the price of its popular F-Lightning e-pickup twice in the fourth quarter of 2022, citing “continuing supply chain constraints, rising material costs, and other market factors.”

It raised the price of its e-truck by 11% in October, so the base model now costs $51,974. In December, it raised the price again by $4000, bringing it to $55,974.

Ford’s plans for wholesale shipments and sales in North America give people reason to be hopeful. The high prices of vehicles are mostly offsetting the rise in the prices of goods, which keeps huge margin erosion from happening. EBIT from the North America segment is expected to be $3,398 million, which is up from $1,822 million last year.

How Is The Ford (F) North America Unit Positioned Prior To Q4 Earnings
How Is The Ford (F) North America Unit Positioned Prior To Q4 Earnings

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Ford’s Earnings & Revenue Projections for Q4

Ford’s earnings and automotive sales for the fourth quarter are expected to be 59 cents per share and $39.8 billion, respectively, according to the Zacks Consensus Estimate.

Investors should know that our proven model can’t say for sure that Ford will beat its earnings this season. When a positive Earnings ESP is combined with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold), the chances of an earnings beat go up. Not true in this case. Ford has a Zacks Rank #5 and an Earnings ESP of 0% right now (Strong Sell).

With our Earnings ESP Filter, you can find out which stocks are the best to buy or sell before the earnings report comes out. Here is a full list of the Zacks #1 Rank stocks for today.

Stocks With the Favorable Combination

Even though it doesn’t look like Ford will beat earnings, here are a couple of auto companies that, according to our model, have the right mix of factors to beat earnings for the next quarter:

Lear LEA will report its results for the fourth quarter of 2022 on February 2, before the stock market opens. The company has a Zacks Rank #3 and an Earnings ESP of +2.71%.

The Zacks Consensus Estimate for Lear’s earnings and sales for the next quarter is $2.53 per share and $5.26 billion, respectively. In the last four quarters, LEA’s earnings were better than expected by an average of 18%.

Harley-Davidson HOG will announce its results for the fourth quarter of 2022 on February 2, before the stock market opens. The company has a Zacks Rank of #2 and an Earnings ESP of +300%.

Earnings and sales for Harley-next Davidson’s quarter are expected to be 3 cents per share and $880.5 million, respectively, according to the Zacks Consensus Estimate. In the last four quarters, HOG beat earnings estimates three times and fell short once. The average surprise was 43.3%.

With the Zacks Earnings Calendar, you can keep track of when earnings reports are coming out. Want to know what Zacks Investment Research is recommending right now? You can get a copy of 7 Best Stocks for the Next 30 Days today. Click here to get this report for free

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