Ford (F) is scheduled to report quarterly results after market close on Wednesday, October 27 with a conference call scheduled for 5:00 pm EST, while General Motors (GM) is scheduled to report before the market opens on Wednesday, with a conference call scheduled for 10 am EST. What to watch for:
1. FORD SALES: In August, Ford reported July U.S. sales down 31.8% to 120,053 vehicles. "In addition to the sales we delivered in July, our retail order bank increased over 70,000 units, excluding our Bronco and Maverick retail orders, which is 10 times higher than we were a year ago. Our newest products, including F-150 PowerBoost, Mustang Mach-E, Bronco and Bronco Sport, are conquesting at a rate that is almost 14 points higher than Ford overall. With our strong portfolio of new products, robust transaction pricing and a big order bank, we are perfectly positioned for significant growth as the semiconductor chip situation improves," said Andrew Frick, vice president, Ford Sales U.S. and Canada. Mustang Mach-E July sales grew 15.8% in July compared to June and F-150 Lightning reservations exceeded 120,000.
Meanwhile, in September, the company reported August U.S. sales down 33.1% to 124,176 vehicles. "Retail sales increased 6.5% in August relative to July, as production and dealer inventories showed monthly gains. Nearly a third of our retail sales came from presold orders last month, while adding an additional 41,000 new orders for the month. With improved availability, F-Series retail sales expanded 11 percent relative to July giving Ford its best F-Series sales month since the chip shortage began, and F-150 Lightning has now surpassed 130,000 reservations," Frick said. "Electrified vehicle sales were up 67.3% over last year for a total of 8,756 vehicles. Electrified vehicles are bringing in new customers to Ford at a rate that is more than 8 points higher than Ford's overall conquest rate," the company added.
In October, Ford reported September U.S. sales down 17.7% to 156,614 vehicles. Ford said: "September's results made Ford the number No. 1 seller of vehicles in the U.S. for the month. August improvements in production and inventory paid off in September, with Ford's retail sales up 34.3% over the previous month, boosting Ford's retail share for the month to an estimated 12.9% - up 3.8 percentage points over August... Going into October, Ford's gross stock totaled 236,000 - up 21,000 vehicles compared to the start of September. Vehicles are moving from dealer lots to customers at the fastest pace this year, while 31% of retail sales where from previously placed customer orders. This compares to 6% last year... Ford's electrified vehicle portfolio continues to attract new customers to the brand at a higher rate than Ford overall - at a conquest rate that is 6 points above. September brought another new record for Ford electrified vehicles. Ford's electrified vehicle sales hit 9,150 - up 91.6% over last year. F-150 Lightning reservations have now surpassed the 150,000 mark, with over 75% of these reservations coming from outside of Ford."
2. FORD PARTNERSHIPS, INITIATIVES: In July, Argo AI, Lyft (LYFT) and Ford announced a collaboration to commercialize autonomous ride hailing at scale. Argo AI and Ford will deploy Ford self-driving cars, with safety drivers, on the Lyft network, as part of a network access agreement, with passenger rides beginning in Miami later this year and in Austin starting in 2022. In September, the company’s micromobility unit Spin announced its expansion to Portugal and Ford India announced plans to cease vehicle manufacturing as part of its India operations restructuring. Additionally in September, the automaker announced a partnership with Argo AI and Walmart (WMT) to launch an autonomous vehicle delivery service and an investment of an additional $250M into F-150 Lightning truck production. The company also announced a partnership with Redwood Materials on battery recycling and supply chain for electric vehicles and the construction of two new campuses in Tennessee and Kentucky.
3. ANALYST VIEW: Credit Suisse analyst Dan Levy upgraded Ford Motor to Outperform from Neutral with a price target of $20, up from $15. In the past year, the analyst has seen a "significant turnaround" at Ford. The company has ended its cycle of quarterly earnings disappointments and its transition to electric vehicles has "sharply accelerated," Levy said. The analyst believes "there is more opportunity ahead," saying Ford will not only benefit from improving fundamentals, but also changing its perception on long positioning in electric vehicles and digital. JPMorgan analyst Ryan Brinkman raised the firm's price target on Ford Motor to $20 from $18 and keeps an Overweight rating on the shares. The analyst increased estimates "considerably to forecast a large beat" in Q3. Unlike GM in Q3, Ford's production in the quarter appears to have tracked materially better than for the industry as a whole, representing a 36% sequential increase versus Q2, Brinkman said. Deutsche Bank analyst Emmanuel Rosner raised the firm's price target on Ford to $18 from $16 and keeps a Hold rating on the shares. The analyst expects the ongoing U.S. autos earnings season to feature large Q3 misses from most U.S. suppliers, along with deep cuts to their fiscal 2021 outlooks, but "robust" performance and guidance from automakers.
4. GM SALES: In October, General Motors dealers delivered 446,997 vehicles in the U.S. in the third quarter of 2021, down 218,195 units from a year ago "as a result of semiconductor supply chain disruptions and historically low inventories," the company announced. "During the quarter, GM provided an update for investors that its wholesale volumes in North America in the second half of 2021 would be down about 200,000 units from the first half, largely because of supply chain disruptions in Malaysia caused by COVID-19, with most of the impact occurring during the third quarter. GM's financial outlook is still expected to be within the calendar year guidance range previously provided as the company continues to develop solutions to mitigate the impacts of the semiconductor shortage and Chevrolet Bolt EV recall," GM said. "Despite challenging conditions during the third quarter, GM maintained or increased its retail market share in key segments compared with a year ago," the company added, citing J.D. Power PIN estimates.
5. GM PARTNERSHIPS, INITIATIVES: In July, GM announced a collaboration with Controlled Thermal Resources to secure low-cost lithium and said certain SUVs would lose wireless phone charging due to the chip shortage. In August, the company announced a partnership with AT&T (T) for 5G cellular connectivity and in September, partnered with Telus (TU) for connected vehicle services. GM also announced in September it would resume production for the Chevrolet Bolt EV battery as well as offer OnStar emergency service at home via a partnership with Amazon (AMZN). The company also invested $300M in autonomous driving technology company Momenta in September and partnered with Motorq to offer an In-Vehicle Coaching service.
6. ANALYST VIEW: JPMorgan analyst Ryan Brinkman raised the firm's price target on General Motors to $80 from $77 and kept an Overweight rating on the shares. The analyst increased estimates "considerably to forecast a large beat" in Q3. However, the outlook for GM's Q3 on an underlying basis "deteriorated throughout the quarter," given the supply chain impacting the automaker's North America production, Brinkman said. He views General Motors' valuation as "inexpensive" at current share levels.
Ford
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General Motors
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AT&T
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Amazon.com
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