Ford Motor on Wednesday reported a disappointing second quarter, missing earnings expectations by a wide margin as higher warranty costs ate into profits. We're downgrading the automaker and sending its stock back to the penalty box in response to the reemergence of these quality problems. Automotive revenue increased 6% year over year, to $47.
8 billion, beating analysts' forecasts of $44.02 billion, according to estimates compiled by LSEG. Adjusted earnings per share fell 35% on an annual basis to 47 cents, falling well short of the 68-cent estimate, LSEG data showed Adjusted earnings before interest and taxes , or EBIT, declined 27% from last year to $2.
76 billion, missing expectations of about $3.7 billion, according to estimates compiled by FactSet. Ford Why we own it : We're in Ford due to management's focus on getting out of money-losing businesses, increasing product quality and quickly shifting production based on consumer preferences.
All of these factors stand to support higher earnings and cash flow over time, which will in turn lend themselves to greater shareholder returns via dividends and buybacks. Competitors : General Motors , Tesla and Stellantis Weight in portfolio : 2.33% Most recent buy : Dec.
29, 2022 Initiated : Nov. 24, 2020 Bottom line It was a frustrating quarter for Ford and shareholders alike, with shares down about 11% in extended trading Wednesday. That puts the stock on track wipe out its gains this year when the market opens Thursday.
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