Ford (NYSE:F) will report quarterly earnings on April 24 after market close. Most analysts (eight of the 12, per tipranks) have a 'hold' rating on the stock. Expectations are low for the company’s earnings. At $0.26 a share, profits are sharply lower sequentially and compared to last year. Should investors hold Ford stock, expecting the latest rally to hold up following the earnings report?
Ford shares are up ~25% year-to-date, due mostly to macro tailwinds. The trade war between China and the U.S. is ongoing and unresolved.
The lack of progress could prove beneficial for the automaker. So long as tariffs are unchanged, Ford may manage this year’s production and product launch without worrying about the unknowns.
Already, Ford forecast profits rising by a solid $1 billion on improvements from the Michigan truck plan. By stuttering production of the C-Max hybrids and the Focus compact cars, Ford may increase production of its stronger, more profitable product.
Ford’s truck always had the potential to increase Ford’s profit margins. But distractions from having too wide a variety in its products hurt profits. Ranger and Bronco, plus SUV output, will lift the ASP and profits for 2019.
Expect Ford affirming the profit outlook and potentially raising it for 2019.
Disclosure: Author owns shares of Ford
