As Ford Authority reported yesterday, Ford stock took a big hit in the early morning pre-trading hours following the release of the automaker’s Q2 financials. This was due to the fact that FoMoCo’s adjusted profit of 47 cents per share was far below analyst expectations of 68 cents, while warranty costs were also far higher than expected – $800 million more than Q1 2024, in fact, as the automaker works to rectify lingering quality issues from the 2016 and 2021 model years. Turns out, Ford stock wasn’t done taking a proverbial beating as of yesterday morning, either.
Rather, according to CNBC, Ford stock closed out Thursday’s trading period at $11.16, which is an 18.4 percent decline. That loss was its worst since 2008, and the second-worst performance of any S&P 500 company yesterday, to boot. The Blue Oval certainly wasn’t alone in that regard either, as its Detroit Big Three counterparts – General Motors and Stellantis – also suffered steep declines of five percent and 7.7 percent, respectively, even though GM actually outperformed analyst expectations in the past quarter.
Aside from Ford’s soaring warranty costs, Wall Street remains skeptical of future performance from all three legacy automakers. Regardless, certain analysts also expressed optimism about Ford’s underlying business operations, at least. Morgan Stanley’s Adam Jonas continues to trumpet Ford as one of his “top picks,” in fact, though he cautioned that “our conviction is being tested by continued challenges…many of which we believe are within management’s control.”
Looking ahead, Ford still expects to hit its warranty cost targets for the entirety of 2024, and continues to work to improve initial quality and drive down those costs. Along with tying management bonuses directly to quality, Ford has also been conducting quality checks on all of its refreshed and redesigned models prior to shipping them. That process began with the all-new 2023 Ford Super Duty – costing the automaker $1 billion to complete – though it also reportedly prevented a dozen recalls for the refreshed 2024 Ford F-150. These quality checks will likely result in delayed launches moving forward, but are already paying off, as the automaker ranked above the mass market average in J.D. Power’s most recent Initial Quality Study (IQS).
We’ll have more on the status of Ford stock soon, so be sure and subscribe to Ford Authority for ongoing Ford stock news and around-the-clock Ford news coverage.
Comments
Totally deserved. All of those recent stock price rises were a joke. Ford is a total mess. Investing in EVs like they did is absurd.
Quality issues aren’t limited to 2016 and 2021 model years. Try 2013 TO 2024.
Hindsight. If Ford had stayed out of the EV game 3 years ago, do you think WallStreet would have treated the stock the way Toyota was for choosing to wait and see? Even at the time they were singling out Ford as an EV laggard. Farley tried to play the game versus dipping their toes in and WallStreet made him the poster child for it. Ford’s other mistake was breaking out EV sales, no other OEM does this.
Amen brother!! “Go Woke Go Broke”