Ford Stock Surges To Seven Year High On Q3 Earnings Beat, Dividend Return
Ford stock Motor (F) – Obtain Ford Motor Company Report shares rose to their highest level in more than seven years on Thursday, after the automaker outperformed its larger rival, General Motors (GM) – Get General Motors Company (GM) Report, with stronger-than-expected third-quarter sales and raised its full-year profit forecast.
Ford reported adjusted earnings of 51 cents per share for the three months ending in September, a 15.4 percent decrease from the same period last year but well above of the Street average of $27 cents per share. Ford reported that group revenues fell 4.8 percent year on year to $35.7 billion, well ahead of analysts’ expectations of $32.5 billion. On December 1, Ford stock will also pay a 10 cent dividend per share for the fourth quarter.
Ford said adjusted earnings for the whole year will be between $10.5 billion and $11.5 billion, up from its previous projection of $9 billion to $10 billion.
“We had to turn around our automotive operations
and increase our competitiveness to construct this future and earn the margins and cash flow we need to fund Ford stock+,” CEO Jim Farley said during a conference call late Wednesday. “Our third-quarter results suggest that we are making great progress. In reality, we earned an 8.4 percent EBIT margin across the board, including a 10.1 percent margin in North America. Those margins, I might point you, are in line with our 2023 targets.”
“I am confident that we have the proper strategy in place to accelerate growth and unleash exceptional value.You can already observe a positive shift in the slope of our earnings and cash flow “He said. “There will be more to come. We are raising our full-year adjusted EBIT guidance to between $10.5 billion and $11.5 billion due to the strength of our company this year.”
Ford shares were tagged 12.44 percent higher in early trade following the earnings release, changing hands at $17.45 per, a move that might propel the stock to its highest level in almost seven years.
“The result is quite positive,” said Credit Suisse analyst Dan Levy, “reminding us of better-than-expected earnings power, a good capital allocation plan, and eventually the capacity to support the transition to an EV/AV/digital world.”
General Motors (GM), Ford’s greater rival – Prior to the start of trade, General Motors Company (GM) Report surpassed the Street’s third-quarter profits projections, but held to its full-year profit forecast and warned that the worldwide semiconductor shortage would likely linger until the second part of next year.
GM predicted that adjusted earnings in 2021 will “near the upper end” of its previous prediction of $5.70 to $6.70 per share, or $11.5 billion to $13.5 billion.
The group’s shares closed the Wednesday session 5.3 percent lower at $54.34 per share.
Ford said earlier this month that overall U.S. vehicle sales were down 17.7 percent from last year, totaling 156,614 units in September. According to Ford stock, truck sales plummeted 22.6 percent to 83,554 vehicles. However, sales of its electrified vehicles increased 91.6 percent year on year to 9,150, while reservations for the new electrified F-150 Lightning surpassed 150,000.
Despite plant closures and delays related to the global semiconductor shortage, Ford managed to increase its overall inventory by 21,000 vehicles over the month, reaching a gross stock total of 236,000 units