Ford (F) and General Motors (GM) are set to report their earnings with Ford reporting fiscal first quarter earnings after the market close on Wednesday, April 25 with a conference call scheduled for 5:30 pm ET. GM is scheduled to report its Q1 results before the market open on Thursday, April 26, with a conference call scheduled for 9:00 am ET. What to watch for: 1. GUIDANCE: When Ford reported its Q4 results on January 24, it affirmed its FY18 adjusted earnings per share guidance of $1.45-$1.70, against an analyst consensus of $1.62, at that time. Ford also expects FY18 revenue growth view flat to modestly higher than FY17. When GM reported its Q4 results on February 6, it announced FY18 EPS guidance in the mid-$6 range, against analyst expectations of $6.05, at that time. GM also announced it sees FY18 core EBIT-adjusted and automotive adjusted free cash flow largely in-line with core business performance in FY18. 2. TRADE WAR: In the beginning of April, China's Ministry of Commerce announced that it will levy 25% reciprocal tariffs on 106 U.S. products including planes, soybean, automobile, chemicals, wheat, corn, cotton, sorghum, tobacco and beef. The agency said the move is in response to the United States' proposal to impose a 25% tariff on imported high-tech products. China said the reciprocal tariffs will apply to around $50B of U.S. imports. Commenting on potential implications, Bernstein analyst Robin Zhu told investors that if enforced, this would mean cars imported from the U.S. would face 50% import tariffs, up from the usual 25%. On April 10, the Financial Times reported that China plans to "significantly lower" import tariffs on imported vehicles, citing comments from Chinese President Xi Jinpin, who was speaking at the Bo'ao Forum for Asia just hours after U.S. President Donald Trump complained in a tweet that China's 25% tariff on imported cars was 10 times that assessed by the U.S. 3. SEASONALLY ADJUSTED ANNUAL RATE GUIDANCE: On Ford's March U.S. sales conference call, on April 3, the company announced it sees total industry SAAR in the mid-17M range, with sales of about 1.6M-1.7M vehicles for the month. Ford said the industry was up roughly 3% from last year and added that it "may even go over that number." On March 1, GM announced the light vehicle SAAR last year was 17.5M units, compared with the current SAAR of about 17.1M.
