Ford Stock News: Ford Motor Company’s results were in line with the decreased expectations, although the company’s projection was reduced somewhat. However, this was sufficient to cause a decline in the price of Ford shares during the after-hours trade on Wednesday.
Ford Stock Profit Gain
On average, analysts on Wall Street anticipated an operating profit for the third quarter of around $1.8 billion, based on sales of $36.4 billion. On revenues of $38 billion during the company’s second fiscal quarter, Ford posted an operating profit of around $2.9 billion.
The company’s earnings have decreased sequentially, but in the middle of September, Ford (NYSE:F) cautioned investors that the company wouldn’t be able to produce more than 40,000 vehicles owing to a lack of parts. Because of this, together with greater expenses incurred by suppliers, billions of dollars in operational profit were moved from the third quarter to the fourth quarter.
When presenting an update in September, Ford stated that it will retain its previous projection of an operating profit for the entire year ranging from $11.5 billion to $12.5 billion. Ford (NYSE:F) has updated its guidance for the year, saying it anticipates an operating profit of $11.5 billion. That’s the bottom of the range that was previously suggested.
Since the warning in the middle of September, the stock price has fallen by around 14%. Over the same time period, the S&P 500 has experienced a decline of almost 2%. There was a 3% increase in the Dow Jones Industrial Average. In trading that took place after regular business hours on Wednesday, soon following the announcement of the findings, Ford shares had a decrease of 1.8%.
In addition to financial guidance, the Ford (NYSE:F) report contained a lot of information that investors should consider.
To begin, Ford announced in the report for the quarter that it had made a gain of $600 million on its investment in Rivian Automotive RIVN –0.14% (RIVN). Nearly 10 percent of Rivian shares is owned by Ford. The price of Rivian shares increased by approximately 27% during the third quarter.
Additionally, Ford (NYSE:F) is writing down its investment in the autonomous driving technology startup Argo A.I. The sentiment of investors can suffer as a result of this. Investors may have anticipated that it would turn out to be a secret asset worth billions of dollars, comparable to the Cruise business of General Motors (GM) or perhaps Waymo, which is owned by Alphabet (GOOGL). However, Ford is now re-evaluating its self-driving plans, so that statement is not accurate.
Argo AI was focusing on developing technologies for level 4 autonomous driving. At that level, drivers are exempt from the obligation to maintain any level of attentiveness under specified conditions.
“The creation of excellent and distinctive [Level 2-plus] products is mission-critical for Ford.” and
“[Level 3] applications that simultaneously make transportation even safer,” stated the company’s CEO Jim Farley in the news statement.
The options markets suggest that following the release of earnings, Ford shares will move around 6% to 7% in either direction. That corresponds to the post-earnings volatility that share prices have seen during the course of the last four quarterly reports.
Ford (NYSE:F) shares had lost around 38% of their value since the beginning of the year as of the opening of trade on Wednesday, while the S&P 500 and Dow Jones Industrial Average had lost approximately 19% and 12%, respectively.
Featured Image- Megapixl @ Boggy
Author Valerie Remorosa 
