Ford Q3 earnings on deck: What to expect

Ford (NYSE:F) is set to post third quarter results on Monday, after markets close.

Wall Street expects the Detroit-based automaker to post EPS of $0.48, implying a rise of 23.1%, while revenue is expected to grow 1.9% to $41.95 billion during the quarter.

Ford has been facing headwinds due to soft consumer spending in the face of economic uncertainties, slow signs of rebound for EVs and intense competition from other legacy automakers.

Earlier in July, Ford’s profitability eroded in the second quarter as increased warranty costs and losses associated with its electric vehicle division left the carmaker with an adjusted profit of $0.47 per share, down $0.25 from the same quarter last year and $0.21 below Wall Street’s expectations.

Over the last two years, Ford has beaten EPS estimates 50% of the time and has beaten revenue estimates 75% of the time.

Seeking Alpha analysts are bullish and rated the stock a Buy. However, Wall Street analysts and Seeking Alpha’s Quant rating are cautious and consider it a Hold.

The company’s Q3 total vehicle sales were up 0.7% in the third quarter to 504,039, driven by a 38% surge in hybrid sales and 12.2% increase in sales of its electric vehicles. Ford’s ICE sales saw a 2.8% decline.

“Ford’s raised its full-year FCF guidance in Q2 which I expect the company to confirm. Solid Q3 EV sales, especially with regard to the Lightning F-150, signal strong earnings potential,” noted Seeking Alpha analyst The Asian Investor, adding that a strong Q3 earnings report could trigger a breakout, driven by strong delivery accomplishments and a potential EPS beat.

Seeking Alpha analyst Luca Socci said Ford’s Q3 sales report looked promising in terms of volumes, but profitability is under pressure.

A better-than-expected third quarter from General Motors (GM) also gave investors reasons to be hopeful. Tesla (TSLA) also impressed the market with its Q3 earnings report.

Over the last three months, EPS estimates have seen 10 upward revisions, compared to one downward revision. Revenue estimates have seen two upward revisions versus four downward moves.

The stock lost over 8% so far this year, compared to the nearly 22% rise in the broader S&P500 Index.