What Will Drive Ford’s Growth In 2019?
Ford Motors (NYSE: F), the American auto maker, announced its Q1 2019 results recently, followed by a conference call with analysts. The company beat consensus for revenue which was recorded at $40.3 billion, down by 3.9% year on year. The decrease was driven largely by lower volume in the quarter and couldn’t be offset by a strong mix and higher net pricing. The earnings also beat consensus and were recorded at $0.29, lower than $0.43 per share in the same period of 2018.
We have summarized our key expectations from the earnings announcement in our interactive dashboard – What Has Driven Ford’s Revenues & Expenses Over Recent Quarters, And What Can We Expect For Full-Year 2019? In addition, here is more Consumer Discretionary data.
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Key Factors Affecting Earnings:
Revenue beats consensus in Q1 2019:
- Ford’s Total Revenue in Q1 2019 was recorded at $40.3 billion, down 3.9% year-on-year.
- The decrease was driven largely by lower volume in the quarter and couldn’t be offset by a strong mix and higher net pricing.
- North America segment was the only segment with positive growth with Revenue increasing by $0.6 billion year on year and an increase of 10 basis points in market share.
Trend in Expenses:
- Ford’s Total expenses have moved similar to its revenue over the quarters. This trend continued in Q1 2019.
- In Q1 2019 North America EBIT margin at 8.7%, up 90 basis points, driven by strong net pricing and product mix.
- While outside North America, the company suffered an EBIT loss of $196M which is a $632M improvement from the prior quarter.
Full Year Outlook:
- For the full year, we expect gross revenue to decrease by 1% to $158.7 billion in 2019.
- Decrease is expected from the Asia-Pacific segment while the others are expected to remain more or less flat.
- Gross margin is expected to increase slightly to around 21.2%.
Trefis has an estimate of $11 for Ford’s stock. The company is looking to consolidate its operations after the transition year in 2018.
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