Ford's Earnings Needed To Clear a High Bar. They Didóand the Stock Is Soaring. | F Message Board Posts


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Msg  2169 of 2190  at  7/27/2022 9:41:32 PM  by

jerrykrause


Ford's Earnings Needed To Clear a High Bar. They Didóand the Stock Is Soaring.

 

Ford's Earnings Needed To Clear a High Bar. They Did—and the Stock Is Soaring.

 

Investors were hoping for a strong earnings outlook from Ford Motor. They got it—and the stock is soaring.

Wednesday evening, Ford (ticker: F) reported a profit of 68 cents a share, and an operating profit of $3.7 billion from $40.2 billion in sales. Wall Street was looking for about 45 cents a share and an operating profit of $2.6 billion from sales of $34.8 billion.

Operating profit margins came in at 9.3%, up from 6.7% in the first quarter of 2022 and up from 3.9% in the second quarter of 2021.

"We're moving with purpose and speed into the most promising period for growth in Ford's history," said CEO Jim Farley. "We're giving customers great experiences and value, improving our profitability and making Ford the next generation transportation leader."

Shares have jumped more than 6% in after-hours trading after gaining 5% in regular trading Wednesday. The S&P 500 and Dow Jones Industrial Average rallied about 1.4% and 2.6%, respectively.

In addition to the better-than-expected second-quarter results, the company maintained its full-year operating-profit guidance of $11.5 billion to $12.5 billion. That implies Ford will generate an operating profit of about $6 billion in the second half of the year. That's similar to the amount earned in the first half.

Wall Street, meanwhile, is projecting $6.3 billion for the second half, but if the second quarter offers any indication, the number could be higher. The consensus call among analysts was for about $2.6 billion in second-quarter operating profit, a figure the company beat by more than $1 billion.

The second-quarter results look like the solid report Ford needed after its peers also delivered robust performances for investors.

Wednesday morning, Mercedes-Benz (MBG.Germany) said it expects demand for its vehicles to outstrip supply for the rest of the year. Tuesday, General Motors (GM) said it expects to make more money in the second half of the year. And last week, Tesla (TSLA) said it was trying to reduce how long people have to wait for its cars by boosting production.

There seems to be pent-up demand for cars after supply-chain problems such as a lack of semiconductors constrained global auto production for several quarters.

Options markets implied Ford stock would move about 6%, up or down, following the earnings report. Ford shares have moved about 6%, up or down, on average following the past four quarterly reports. Shares have risen twice and fallen twice over that span.

Through Wednesday trading, Ford stock was down about 36% year to date, while the S&P 500 and Dow Jones Industrial Average were off about 16% and 11%, respectively.

 


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