What To Expect From Ford Motors’ Q1 Earnings
Ford Motors (NYSE: F) will release its first-quarter 2018 results and conduct a conference call with analysts on April 25th. The company is expected to have a moderate quarter with declining sales volume and higher costs weighing on results. Consensus analysts estimates reflect year-on-year (y-o-y) revenue growth of a mere 2% at $36 billion and adj-EPS growth of 5% at $0.41.
Lower Sales Volume To Weigh On Revenue With Increased Average Sales Price To Provide Some Relief
Ford’s 2018 year-to-date (YTD) sales volume in the U.S. and China declined by 2.9% and 19% y-o-y, respectively per the latest sales figures released by the company. Ford’s U.S. March sales volume saw an uptick with consumers notably taking benefit from lower financing rates ahead of anticipated interest rates hikes through the remainder of the year. However, YTD sales volume continue to be lower which is expected to weigh on the company’s top line. Regardless of declining sales volume, the company is expected to benefit from higher average sales prices as a result of higher sales volume of the more expensive SUVs and truck variants as the consumer preferences in the U.S. shift towards these vehicles.
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Increased Sale Of Higher Margin Vehicles To Offset Higher Cost Impact To A Certain Extent
Ford’s automotive operating margin declined in 2017 with rising commodity costs, warranties and exchange impacts and recalls. Rising commodity costs are expected to weigh on the company’s margins in 2018 as well. However, with increased sales of higher margin vehicles (SUVs and trucks), profitability is not expected to be significantly impacted by rising costs.
Overall, the company is expected to have a moderate 2018, with changing consumer preference and a declining passenger car market in the U.S.weighing on results. We have outlined our expectations for the company’s 2018 results by using our interactive dashboard. You can make changes to our assumptions to arrive at your own fair price estimate for the company.
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