Ford F is slated to release second-quarter 2022 results on Jul 27, after the closing bell. The Zacks Consensus Estimate for the quarter's revenues and earnings is pegged at $32.83 billion and 44 cents a share, respectively.
The Zacks Consensus Estimate for Ford's second-quarter earnings per share has moved down by a penny in the past 30 days. But the bottom-line projection implies a whopping year-over-year surge of 238.5%. The Zacks Consensus Estimate for quarterly revenues also suggests a year-over-year increase of 36%.
The U.S. auto biggie missed earnings estimates in the last reported quarter on lower-than-expected profits in North America and a wider-than-expected pretax loss in China. Over the trailing four quarters, Ford surpassed earnings estimates on two occasions for as many misses, with the average surprise being 64.56%. This is depicted in the graph below:
Ford Motor Company Price and EPS Surprise
Ford Motor Company price-eps-surprise | Ford Motor Company Quote
Factors Deciding Ford's Fate in Q2
Ford bucked the trend of declining sales in the second quarter and sold 483,688 vehicles in the United States, edging up 1.8% year over year. Robust demand for the F-Series truck lineup, Explorer and Expedition SUVs and the battery-electric vehicles gave a boost to sales. Sales volumes also grew from 432,132 units delivered during first-quarter 2022.
The Zacks Consensus Estimate for wholesale volumes in North America is pegged at 542,000 units, soaring from 327,000 units in the year-ago period. The volumes also compared favorably with 514,000 units in the first-quarter of 2022. Additionally, rising vehicle prices amid the demand supply mismatch are expected to buoy results.The company's average transaction price per vehicle rose by $1,900 month on month in June, driving the average prices for Ford and Lincoln vehicles to $52,200. Consequently, the consensus mark for revenues from North America is $23.4 billion, implying an uptick of 56% and 4.9%, on a yearly and sequential basis, respectively.
While North America market strength is expected to aid overall results, weak sales in China are expected to have played spoilsport. Ford reported its worst quarterly sales data in China since the onset of COVID-19 lockdowns in 2020. The auto biggie sold 120,000 vehicles in China in the second quarter of 2022, indicating a 22% decline on a yearly basis. The resurgence of coronavirus-induced curbs and devasted supply chain systems hurt the sales volume. Notably, the Zacks Consensus Estimate for pretax loss in China is pegged at $109 million, deteriorating from a loss of $53 million incurred in the last reported quarter.
Meanwhile, the consensus estimate for pretax income in South America is pegged at $52 million, turning around from a loss of $86 million reported in the year-ago period, thanks to restructuring efforts. The metric also compares favorably with pretax earnings of $50 million in first-quarter 2021.
The consensus estimate for Ford's pretax loss in Europe is pegged at $56 million, implying a significant deterioration from first-quarter pretax earnings of $207 million but narrowing from the year-ago loss of $284 million.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Ford for the to-be-reported quarter, as it does not have the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Earnings ESP: Ford has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is in line with the Zacks Consensus Estimate.
Zacks Rank: It currently carries a Zacks Rank of 4 (Sell).
Stocks With the Favorable Combination
While an earnings beat appears uncertain for Ford, here are a few players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Driven Brand Holdings (NASDAQ:DRVN) has an Earnings ESP of +14.45% and a Zacks Rank #3.
The Zacks Consensus Estimate for Driven's to-be-reported quarter's earnings and revenues is pegged at 29 cents per share and $486 million, respectively. Encouragingly, DRVN surpassed earnings estimates in the last four quarters, with the average being 30.1%.
American Axle & Manufacturing (NYSE:AXL) has an Earnings ESP of +23.08% and a Zacks Rank #2.
The Zacks Consensus Estimate for American Axle's to-be-reported quarter's earnings and revenues is pegged at 13 cents per share and $1.37 billion, respectively. AXL surpassed earnings estimates in three of the last four quarters and missed once, with the average being 847.9%.
Lear Corporation (NYSE:LEA) has an Earnings ESP of +5.57% and a Zacks Rank #3.
The Zacks Consensus Estimate for Lear's to-be-reported quarter's earnings and revenues is pegged at $1.23 per share and $4.79 billion, respectively. LEA surpassed earnings estimates in three of the last four quarters and missed once, with the average being 6.53%.
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