On Monday, Ford Motor’s shares crashed despite a Q3 earnings beat. The global price war and stellar report from rival General Motors (GM) curbed the revenue outlook.
The Michigan-headquartered company’s stock rose 2.71% to $11.37 apiece on October 28 but plunged by 5.98% to $10.69 after hours. Analysts expect the downward momentum to continue with a 1.68% drop to $10.51 per share in the coming market session.
In the third quarter, Ford reported earnings per share of $0.49, topping the market consensus of $0.47. This reading indicated a sharp year-over-year increase from $0.39 in Q3 2023.
Similarly, quarterly revenues stood at $46.20 billion, exceeding expectations of $45.32 billion. The figure represented a moderate bump from the $44.00 billion earned in the same quarter last year.
However, the automaker cut its full-year earnings estimate to $10.00 billion from a median of $11.00 billion. CEO Jim Farley blamed the pessimistic revision on the global price war driven by over-capacity and a deluge of new models.
CFO John Lawler also noted the firm’s ongoing supply chain issues, exacerbated by recent hurricanes. Moreover, accelerating warranty costs strained the profit margin, mitigating the total net proceeds.
Lastly, Ford posted a third-quarter net income of $896.00 million, a smaller-than-expected slide from $1.17 billion last year. The Q3 results include the $1.00 billion loss from canceling a three-row electric SUV project in August.
GM Q3 Performance Dampens Ford Guidance
Last week, GM distressed Ford and other carmakers with its upbeat third-quarter earnings report. Its EPS of $2.96 and sales of $48.76 billion far outpaced projections of $2.40 and $44.74 billion, respectively.
Following the report, GM notched its best trading day since March 2020, gaining a remarkable 9.81%. In addition, the automaker revised its median full-year adjusted earnings forecast to $14.50 billion from $13.00 billion.
GM asserted its global dominance by topping Wall Street EPS predictions for nine consecutive quarters. Hence, investors in Ford and other carmakers expressed concern that GM might significantly expand its market share through 2025.