{"id":41618,"date":"2023-07-28T11:02:17","date_gmt":"2023-07-28T15:02:17","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/ford-stock-is-falling-after-strong-results-evs-are-an-issue\/"},"modified":"2023-07-28T11:02:18","modified_gmt":"2023-07-28T15:02:18","slug":"ford-stock-is-falling-after-strong-results-evs-are-an-issue","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=41618","title":{"rendered":"Ford Stock Is Falling After Strong Results. EVs Are an Issue."},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000704067\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<\/figure><\/div>\n<p>\n        Ford Motor<br \/>\n       investors have plenty to worry about these days: Interest rates, car pricing, and vehicle demand. <\/p>\n<p>At least earnings aren\u2019t a problem.<br \/>\n        Ford<br \/>\n       posted better-than-expected quarterly results and raised its financial forecasts for the full year, sending the stock higher in late trading.  <\/p>\n<p>Thursday evening, Ford (ticker: F) reported second-quarter earnings per share of 72 cents and an operating profit of $3.8 billion. Sales were $45 billion. <\/p>\n<div class=\"paywall\">\n<p>Wall Street was looking for EPS of 54 cents and an operating profit of $3.2 billion from sales of $43.2 billion. In the second quarter of 2022, Ford reported EPS of 68 cents a share and an operating profit of $3.7 billion from sales of $39.4 billion.  <\/p>\n<p>For the full year, Ford sees operating profit coming in between $11 billion and $12 billion. The prior forecast was for a profit between $9 billion and $11 billion.  <\/p>\n<p>Ford stock was initially up after results were posted. Shares were down 1.4% in premarket trading Friday.<br \/>\n        S&amp;P 500<br \/>\n       and<br \/>\n        Dow Jones Industrial Average<br \/>\n       futures were up 0.3% and 0.1%, respectively. <\/p>\n<p>Electric vehicles are one reason for the dip. Ford Model e, the company\u2019s EV division, reported $1.8 billion in sales and a loss of $1.1 billion. Comparisons to the year-ago quarter aren\u2019t meaningful for the fledgling division. <\/p>\n<p>The Model e loss was expected because making cars requires economies of scale. Auto makers need to ship a minimum of roughly 100,000 vehicles a quarter to approach profitability. Ford delivered 34,000 fully electric and hybrid vehicles in the second quarter, up from 12,000 in the first quarter. <\/p>\n<p>It will take a little longer to reach the scale required for profitability. CEO Jim Farley said on the company\u2019s conference call that Ford is targeting a 600,000 EV production run rate by the end of 2024. The prior goal was 600,000 by the end of 2023. <\/p>\n<p>The standout division was Ford Pro, Ford\u2019s commercial business. Sales came in at $15.6 billion, up 22% from a year earlier. Operating profit came in at $2.4 billion, up $1.5 billion.<\/p>\n<p>Ford Blue, the company\u2019s traditional car business, generated $25 billion in sales, up 5% from a year before. Operating profit came in at $2.3 billion, down $200 million. <\/p>\n<p>The numbers look solid, which was probably expected by investors. On Tuesday,<br \/>\n        General Motors<br \/>\n       (GM) reported better-than-expected earnings and raised its full-year forecast for operating profit to a range of $12 billion to $14 billion from a prior range of $11 billion to $13 billion.\u00a0<\/p>\n<p>GM\u2019s strong numbers weren\u2019t enough, though. Shares dropped about 3.5% in response to the company\u2019s second-quarter report. Current earnings were fine, but investors are focused on other things, including interest rates, pricing, and labor relations. <\/p>\n<p>The first two issues are making cars expensive. In the second quarter, a record 17.1% of new-car buyers in the U.S. that financed vehicles had monthly car payments north of $1,000. In the second quarter of prepandemic 2019, just 4.3% of new car buyers financing their vehicles paid more than $1,000 a month. <\/p>\n<p>Higher interest rates are part of the reason payments are soaring. Prices are another. The average price of a new car in the U.S. was roughly $49,000 in June, according to Kelly Blue Book. It was about $37,000 in June 2019. <\/p>\n<p>Pricing has started to weaken. Incentives for new car buyers are rising, coming in at about $2,000 a unit in June. Incentives have risen for nine consecutive months and the June figure is the highest since October 2021. <\/p>\n<p>Falling prices always worry investors. \u201cVehicle pricing has driven much of\u00a0GM\u2019s outperformance thus far and could remain a potential source of upside over the rest of the year,\u201d wrote Deutsche Bank analyst Emmanuel Rosner in a Wednesday report following GM\u2019s earnings. \u201cHowever, we see continued risk of price moderation heading into 2024.\u201d <\/p>\n<p>Price moderation is a risk for all auto makers, not just GM. Rosner rates GM shares at Hold and has a target of $40 for the stock. \u00a0<\/p>\n<p>Then there is labor. Investors are a little nervous about negotiations with the United Auto Workers union. The current labor deal for GM, Ford, and<br \/>\n        Stellantis<br \/>\n       (STLA) expires in September. <\/p>\n<p>\u201cAlthough these negotiations promise to be challenging, our goal is to build a bridge to the future with our employees based on mutual trust and a spirit of problem-solving with the UAW leadership,\u201d added Farley on the conference call. <\/p>\n<p>Coming into Friday trading, Ford shares were down about 2% over the past 12 months. The S&amp;P 500 and Dow were up about 11% and 8%, respectively. <\/p>\n<p>Write to Al Root at allen.root@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/ford-earnings-stock-ev-602121b0?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ford Motor investors have plenty to worry about these days: Interest rates, car pricing, and vehicle demand. At least earnings aren\u2019t a problem. Ford posted better-than-expected quarterly results and raised its financial forecasts for the full year, sending the stock higher in late trading. Thursday evening, Ford (ticker: F) reported second-quarter earnings per share of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":41619,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-41618","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Ford Stock Is Falling After Strong Results. EVs Are an Issue. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Ford Motor investors have plenty to worry about these days: Interest rates, car pricing, and vehicle demand. 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