Ford Motor (F) plans to report earnings for the fourth quarter late Thursday, after a challenging year for its vehicle sales and recession risk ahead. F stock edged higher early Wednesday.
The Ford earnings report comes after Ford took the No. 2 spot for U.S. EV sales in 2022, though it was a distant second to Tesla (TSLA). Ford is set to report January U.S. sales on Feb. 2 as well.
Earnings guidance and outlook for Q1 and 2023 is expected. Analysts warn that automakers are swapping supply challenges for demand woes, amid the rise in inflation and interest rates.
Updates on Ford’s production ramp on electric vehicles will also be in focus. Despite growing EV sales, Ford saw tight inventories, due to limited production, limit its electric-car growth last year.
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Ford Earnings
Estimates: Analysts polled by FactSet expect Ford earnings to rebound 139% to 62 cents per share, reflecting an easy year-ago comparison in part. Revenue is seen growing nearly 12%, year over year, to $42.094 billion.
In the year-ago quarter (Q4 2021), automakers’ quarterly sales broadly took a hit from weak vehicle inventories caused by semiconductor shortages and supply-chain issues.
Results: Check back Thursday after the market close.
Outlook: In 2023, analysts project Ford earnings of $1.71 per share, a 12.4% decline from estimated 2022 levels. Revenue for the full year is seen growing 1.5%.
F Stock Builds A Base
Shares of Ford Motor added 0.2% on the stock market today, trading up almost 2% for the week as it moves back above its 50-day and 200-day moving averages. F stock is in a double-bottom base with a 14.77 buy point.
GM stock is forming a cup base with a 41.68 buy point, also back above key technical levels.
Tesla stock has rallied off two-year-plus lows, set in January, after cutting the prices of several models by as much as 20%. TSLA stock has gained 71% from a Jan. 6 low, and is trading back above its 50-day moving average.
The relative strength line for F stock is lackluster. A Relative Strength Rating of 22, out of a best-possible 99, means that F stock has outperformed 22% of all stocks in IBD’s database over the past year.
Supply Woes Hit Auto Sales
In 2022, Ford saw its total new vehicle sales in the U.S. shrink 2.2%, though December sales rose 3.2% as supplies improved. Rival General Motors (GM) managed to grow U.S. sales 2.3% for the full year.
The chip shortage and other supply disruptions hit industrywide vehicle production and inventories for most of 2022, easing in the final quarter. But demand concerns emerged in Q4 and have grown since.
The affordability of new vehicles fell again in December and reached a new low in 2022, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index.
In December, auto loan rates reached a 20-year high and the average new vehicle price hit a record $49,507, Cox Auto says. The typical monthly payment for a new vehicle increased to an estimated $777, another record.
Further muddying the 2023 auto outlook is a weakening global economic outlook. That is a big challenge for auto giants, who are in the midst of a massive and expensive EV transition.
Ford EV Sales, EV Shift Echo Model T
Traditional automakers are setting the stage a big shift away from combustion-engine cars to electric vehicles. Recent Tesla price cuts have possibly ignited a war with GM and Ford.
On Monday, Ford announced it would cut the price of its SUV Mustang Mach-E by as much as $5,900 per vehicle. The company also said it would ‘significantly’ increase production of the vehicle in order to make it more available to customers.
The move quietly echoed the strategy taken by company founder Henry Ford, in launching one of the first mass-produced autos, the Model-T, in 1908.
Chief Customer Officer Marin Gjaja said the company would ramp from current output of 78,000 Mach-Es per year to 130,000.
“And we think we actually can stretch that a bit further over time,” he said.
In 2022, Ford’s EV sales more than doubled to 61,575, despite tight inventories. That made Ford the No. 2 EV maker in the U.S. behind Tesla.
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Ford sold roughly 40,000 Mustang Mach-E electric SUVs last year, as well as nearly 16,000 F-150 Lightning trucks.
But little is know about new Ford EVs coming to the U.S. in 2023. In contrast, GM has three all-new EV models due from its mass-market Chevrolet brand, though it’s struggling to scale up production of existing new, Ultium-branded EVs.
Electric vehicles currently remain a small portion of overall sales for traditional automakers. But, in the long term, the segment is seen as a growth driver for Ford, GM and others.
By 2030, GM, Ford and Stellantis (STLA) expect as much as half of U.S. sales to be all-electric vehicles, also known as battery electric vehicles, or BEVs.
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Source: https://www.investors.com/news/ford-earnings-due-as-automaker-expands-mach-e-strategy/?src=A00220&yptr=yahoo