Ford Shares are Tanking on Lack of Guidance, Bad Q2 Earnings Miss

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July 28, 2016 9:34am NYSE:F

fordAutomaker Ford Motor Company (NYSE:F) on Thursday posted much weaker-than-expected second quarter results and decline to offer specific guidance for Q3 or the full year, sending its shares plummeting in morning trading.


The Dearborn, MI-based company posted Q2 net income of $0.52 per share, which badly missed analysts’ estimates of $0.60 per share. Revenue rose 5.4% from last year to $37 billion, edging out analysts’ view for $36.28 billion.

Other notes from the call included:

  • Automotive segment operating cash flow of $4.2B, an all-time quarterly record.
  • Automotive segment pre-tax profit of $2.8B, down $130M;
  • Automotive segment operating margin 7.7 percent.
  • Europe delivered $467M pre-tax profit, nearly triple year ago results, best ever second quarter.
  • Global market share of 7.5%, down from 7.8% last year.

The real story was the company neglecting to get into any specifics about its outlook, which is never a good sign. Ford simply said the following:

Expect another strong year of results, and Ford committed to full year guidance of company pre-tax profit and operating margin equal to or better than last year; however, company now sees risks challenging achieving guidance. Entire Ford team working to mitigate the risks.

F-2016-07-28

Ford shares fell $1.16 (-8.38%) to $12.68 in Thursday morning trading. The stock has fallen about 10% since the start of 2016, compared with an 8% drop in the First Trust Exchange-Traded Fund (NASDAQ:CARZ), an ETF that tracks the performance of the auto industry.


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