Ford Motor Company (NYSE: F) released Q4 2019 earnings showing shrinking revenues and earnings which missed already pessimistic analyst estimates.
Analysts had expected Ford revenues $36.55 billion which would have been a 5.6% decline over the same quarter last year. Instead, Ford posted Q4 sales of $39.7 billion, a 5% decline year over year.
The company also missed bottom line estimates as they reported earnings of $0.12 per share compared to consensus estimates of $0.17.
Shrinking revenues and profits were not completely unexpected as Ford had already released unit sales results in the for the fourth quarter on January 6th which showed shrinking vehicle sales nearly across the board.
U.S. total vehicle sales in units were down 1.3% compared to the same quarter last year, with rising truck sales of 16% unable to prop up SUV and car sales which declined 4.1% and 41% respectively.
In China, results were likewise disappointing with unit sales down 14.7% over the same quarter the previous year, although slightly better than results from Q3 as vehicle sales were up 11.8% sequentially.
Declining demand for passenger vehicles has been an ongoing headwind for Ford and other automakers as consumer trends especially in the U.S. have been towards larger vehicles such as trucks and SUVs.
Ford announced in April of 2018 that it was beginning to adjust it’s product mix towards those preferences outlining that it would be phasing out all cars in North America except for the Mustang and the Focus Active.
The second largest US auto maker has also begun to make a push towards more electric vehicles. Ford has committed $11.5 billion into electrification and it recently announced that it will work with startup Rivian on a Lincoln branded fully electric vehicle. The announcement follows a splashy reveal for the Mustang Mach-E, an electric SUV leveraging the iconic brand as well as news that the company will be making an electric version of its popular F-150 truck.
Source: Ford
Ford’s stock has rallied back to almost the exact same point it was at when it reported it’s Q3 2019 earnings back in October. The stock closed the day at $9.17 up over 2% prior to releasing earnings and was up just under 30% over 2019, comparable to the S&P which saw a 31.5% increase over 2019.
Immediately following the release of earnings, Ford’s stock was down over 7% in after market trading at the time of publishing.
Meanwhile, the market is definitely pricing the growth opportunities of Tesla much higher than the legacy automakers.
Source: YCharts
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