What's In The Offing For Ford (F) This Earnings Season?

Ford Motor Company (NYSE:F) is set to report second-quarter 2019 results on Jul 24, after the market closes. In the last reported quarter, the company’s earnings surpassed estimates. Over the trailing four quarters, the automaker’s earnings outpaced estimates once, missed the same twice and were in line with the mark once. The average positive surprise was 13.3%.

Over the past three months, shares of Ford have gained 7.4% while the industry rose 0.1%.

Let’s see how things have shaped up for the upcoming announcement.

Factors Influencing the Second Quarter

The U.S.-based auto manufacturer ended the second quarter with a year-over-year plunge in vehicle sales. During the quarter under review, Ford’s total sales in the United States slipped 4.1%. This is likely to hurt second-quarter 2019 results.

In April, Ford announced to recall 27,000 F-Series pickup trucks for the second time to repair the damage that occurred during a previous recall in December 2018. In May, the company recalled roughly 273,000 of Ford Ranger pickups and Fusion vehicles in North America as a transmission glitch in those vehicles could shift gears and roll vehicles if the gear is not in the “park” mode.

For the soon-to-be-reported quarter, the Zacks Consensus Estimate for the company’s net sales from the markets in North America, the Asia Pacific & Africa, and Europe is pegged at $24 billion, $2.1 billion and $7.1 billion, respectively.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Ford this reporting cycle. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

But that is not the case here as you will see below.

Earnings ESP: Ford has an Earnings ESP of -4.40% as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 29 cents and 30 cents, respectively.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Ford currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, its negative ESP makes surprise prediction difficult for the stock this earnings season.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are a few auto stocks worth considering, comprising the right combination of elements to come up with an earnings beat this time around:

Cummins Inc (NYSE:CMI) currently has an Earnings ESP of +3.48% and a Zacks Rank of 3. It is slated to release second-quarter 2019 results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Penske Automotive Group, Inc (NYSE:PAG) presently has an Earnings ESP of +0.42% and a Zacks Rank of 3. It is slated to release second-quarter 2019 results on Jul 30.

Dana Incorporated (NYSE:DAN) has an Earnings ESP of +0.45% and a Zacks Rank of 3 at present. It is slated to release second-quarter 2019 results on Jul 31.

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