Topline
Ford reported second-quarter earnings that fell short of analyst expectations, causing the automaker’s shares to dip 14% on Thursday toward the company’s worst loss in nine months and erasing gains for the year, as other automotive stocks tumbled.
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Key Facts
Ford’s shares fell below $12 as of around 9:20 a.m. in premarket trading, which would pace the company’s worst day since Oct. 27, when shares fell 12% to under $10 after Ford cautioned about losses from its electric vehicle business and other potential losses stemming from a new deal with the United Auto Workers union.
The stock is now down on the year after being up 12% as trading closed on Wednesday, following a 52-week high of $14.85 last week.
Ford reported adjusted earnings per share of 47 cents for its second quarter, missing analyst projections of 68 cents, according to FactSet.
Profitability was affected by an increase in funds for warranty claims, Ford said, as Chief Financial Officer John Lawler told investors that issues were “popping up on our older models,” including some manufacturing issues for cars made in 2021 or later.
Despite a loss in adjusted earnings, Ford reported overall revenue of $47.8 billion, a 6% increase year-over-year.
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Big Number
$1.14 billion. That’s how much Ford reported in losses for its electric vehicle business through three months ending in June. Ford projects losses of up to $5.5 billion from the unit this year, after reporting a $4.7 billion loss for 2023 while citing an “extremely competitive price environment.”
Tangent
Shares of Stellantis (8%) and General Motors (2%) fell on Thursday after announcing second-quarter earnings. Stellantis—the parent company of Jeep, Dodge, Chrysler and others— reported just over $6 billion in net profit for the first six months this year, a 48% decline over the same period last year. GM raised its earnings projections for the year on Tuesday, up from between $9 and $10 per share, to between $9.50 and $10.50 per share, though Morgan Stanley analyst Adam Jones reportedly cautioned the automaker’s stock has likely peaked this year because of waning interest in electric vehicles.
Key Background
Ford chief executive Jim Farley told investors earlier this year the company would “reassess” its electric vehicle business amid an expected increase in losses. The automaker said last week it would invest about $3 billion to expand production of its F-Series trucks at a facility in Ontario, Canada, and other facilities in the U.S. and Canada. The investment includes ending a plan to manufacture a new three-row electric SUV at the Ontario plant, though Ford noted the car’s development would be moved to an unspecified plant. Ford will likely delay the next generation of electric vehicles to “when they can be profitable,” as Goldman Sachs suggests the electric vehicle market faces uncertainty leading up to the presidential election amid lowered prices for used cars and a shortage of charging stations.
Further Reading
Exxon acquiring Pioneer for nearly $60 billion, a mysterious respiratory illness affecting dogs across the U.S. and the challenges against transgender health care. Before joining Forbes, he covered the Black Mountain, North Carolina community for the Asheville Citizen Times. Ty earned his bachelor’s degree in journalism from Auburn University and his master’s degree in journalism from Northwestern University. Email him at troush@forbes.com.
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