Ford shares up 10% as it beats the street on top and bottom lines

Entry posted by ArvinIG in Analyst Article July 28, 2022

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It was a stunning quarter from a company that two weeks ago was looking at what it was doing and whether it was going to have to shed 8,000 staff.

Shares Ford Motor Company Electric vehicle Trade Automotive industry Inflation

With the move to electric vehicles (EVs) it makes sense to shift the focus from building combustion engines to EVs, but last night's second quarter (Q2) earnings came as a pleasant surprise.

Ford shares soar following Q2 earnings

In extended trade last night on the IG platform, Ford MotorFord Motor Co (All Sessions) saw its shares rise around about 10% as a result of earnings coming through for the most recent quarter, which impressed investors.

Let's take a look at the numbers we saw: $0.68 per share at the earnings per share (EPS) level. That was against an estimate of $0.45, beating that up from $0.12 last year. Automotive revenue came through at $37.9 billion, also beating estimates of $34.3 billion, which is a tripling of its profit line because according to the company's statement it was able to deliver more of its products to customers.

But the company said as well that inflation, specifically higher prices for key commodities and transportation, offset some of those gains. Nonetheless, it was a good night last night.

Ford's share price chart

Let's take a look at the share price chart, which is down from the highs that we saw back in January this year. That was at a 21-year high for Ford Motor. Since then, we've seen this pullback because of concerns once again about what's happening with supply chains and, of course, the war in Ukraine keeping a lot of the automotive products out of Ukraine, which is a big supplier of a lot of rubberised items especially, and plasticised items that the auto sector uses.

But since then, we've seen Ford source more of its products from other areas, and we've seen this rebound. That trade last night was extended trade up, and indeed, significantly, it rose above the highs that we saw back on the 3rd of June to take us to levels there not seen since the first couple of weeks of May this year, and we're building on that today. All-sessions on the IG platform this morning it was up a further 1.3%.

So, we're gaining across the board for Ford Motor to stop looking as though it could well rise at the start of today's cash session on the New York Stock Exchange.

Jeremy Naylor | Writer, London
29 July 2022