What To Expect From Ford’s Full Year Results?
Ford (NYSE: F) will release its 2018 fourth quarter and full year financial results on January 23, 2018 after the market closes. The conference call to discuss the results will be at 5:30pm E.T. The market expects the company to report EPS in the range of $1.26 to $1.50, approximately 15% lower than last year. While the revenue estimation is approximately $146.7 billion, 0.7% higher than last year. Low wholesale volume driven by China’s JV remains a big concern for the company with the country still dragging the Asia – Pacific segment into negative EBIT. Ford’s overall income will also be affected due to the rising tariffs on metals due to the trade war with China, with the CEO going on record in September saying that the Company will take a profit hit of nearly $1 billion overall by the end of the next fiscal year.
We have a $9.10 price estimate for the company, which is above the current market price. View our interactive dashboard – Outlook of Ford for FY 2018 – and modify the key assumptions to arrive at your own price estimate for the company.
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Ford sold 752,243 (all models) in China for the Fiscal year 2018 which is 36.9% lower than the Fiscal Year 2017. This shows that the company is struggling to keep pace in the market. The company plans to introduce 10 new models in the year 2019 to remedy the situation. Consequently, the company expects to book a loss in the Asia Pacific region for the Fiscal year 2018.
Further, Ford announced an ambitious restructuring plan earlier this year, which included phasing out of all its sedans in favor of trucks and SUV’s in the North American market, slashing costs, and refocusing on the production of its best-selling SUVs and other profitable ventures. The company also plans to trim around 70,000 salaried personnel by Q2’19 as part of its restructuring program.
Ford Credit is one the positives for the company with posting improved EBIT and ROE in Quarter 3 on the back of increasing auction values and favorable volume and mix.
Thus, the Fiscal Year 2018 for Ford has been a mixed year with Ford Credit doing well and the North America segment has picked up demand in SUV and trucks. While China and Europe expected to drag down the profits due to the fall in sale volumes and increasing tariffs. The uncertainty around the restructuring plan can also bring up surprises for the company in the near term.
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