Ford Stock Falls With Earnings Due, Sales Rebound Ahead Of ‘Launch Of The Decade’

Ford Motor (F) gears to report for the final quarter of 2021 after sales rebounded in January amid the chip shortage. But Ford stock fell.

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On Wednesday, Ford said that sales of electric and hybrid vehicles rose 167% to 13,169 in January. The new all-electric Mustang Mach-E SUV made up 18% of the total. Ford’s overall U.S. sales were flat in January after a 17% decline in December, which could suggest improving chip supplies.

In the past year, Ford stock soared as the former EV skeptic went full-bore on electric vehicles. An all-electric version of its bestselling pickup truck, the F-150 Lightning, unveiled last May, is due to arrive in spring.

When Ford reports late Thursday, investors will hope for a Lightning update, and to hear about management’s outlook for a chip and volume recovery. On Tuesday, General Motors (GM) said it sees the chip situation improving throughout 2022. That contrasted with Tesla (TSLA), which expects its chip supply constraints to continue throughout 2022.

“The F-150 Lightning arguably might be Ford’s most important vehicle launch of the decade, and there’s immense pressure on the automaker to execute a flawless rollout,” Edmunds analyst Jessica Caldwell wrote Feb. 1. But that might be a tall order given supply chain challenges over the past year, she added.

Ford Earnings

Estimates: Wall Street expects Ford earnings to jump 32% to 45 cents per share. Revenue is seen rising 15% to $41.23 billion, according to FactSet.

Results: Check back late Thursday.

Outlook: Analysts forecast 2022 EPS of $2.05, FactSet said. That would compare to expectations for $1.86 in 2021.

In Q4, Ford’s vehicle deliveries fell around 6% year over year in the U.S., though Ford took the sales crown and managed a quarter-over-quarter improvement. In all of 2021, U.S. deliveries fell 7%, while Ford’s deliveries in China rose 3.7%.

For automakers broadly, vehicle supplies rather than demand are weighing on sales as semiconductor supply issues persist.

Offsetting weak sales, average transaction prices continue to rise. In Q4, Ford’s average prices in the U.S. rose by nearly $5,000 year over year to $50,867 per vehicle, according to Edmunds.

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Ford Stock

Shares of Ford Motor lost 1% to 20.42 in Thursday’s stock market trading. Ford stock has undercut its 10-week moving average, and climbed to briefly test resistance at that line on Wednesday. Shares remain far extended following an October breakout.

The relative strength line for Ford stock has pulled back from highs after a solid rally in the past year, according to MarketSmith chart analysis.

GM stock slipped 1.055% Wednesday after a sales miss late Tuesday. CEO Mary Barra disclosed an ambitious EV sales goal at General Motors Tuesday.

Tesla (TSLA) gave up 2.75% and Stellantis (STLA), which includes Fiat, Chrysler and Peugeot, gained 1.4%.

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EV Shift, Auto Chip Shortage

On Tuesday, Bloomberg reported that Ford may spend up to $20 billion more to develop and build electric cars, on top of the $30 billion that the auto giant already has pledged through 2025.

A shift among automakers, including Ford, GM and Stellantis, to electric vehicles has been stymied by a lingering auto chip shortage. Increasingly smart electric vehicles need more chips than traditional gas or diesel vehicles.

By 2030, the Detroit 3 aspire to have as much as half their total vehicle sales be electric — a bold goal given that fossil-fuel vehicles underpin their earnings today.

The global chip shortage, fueled by the pandemic, cost automakers $210 billion in lost revenue in 2021, with 7.7 million fewer vehicles rolling off production lines, the consulting firm AlixPartners estimates.

Both GM and Ford idled or shut several plants, including those making some of their most popular and profitable vehicles, such as Ford’s F-150 truck.

Find Aparna Narayanan on Twitter at @IBD_Aparna.

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