Ford Motor Co. stock on Thursday rose the most in nine years after the storied car maker reported third-quarter earnings that blew past Wall Street expectations.
Ford F, +9.90% shares gained 9.9%, their best one-day percentage increase since late April 2009, to end at $8.99, their highest close since Oct. 8.
Ford late Wednesday said it earned $991 million, or 25 cents a share, in the quarter, compared with $1.57 billion, or 39 cents a share, in the year-ago period. Adjusted for one-time items, Ford earned $1.17 billion, or 29 cents a share, compared with 44 cents a share a year ago.
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Revenue rose 3% to $37.6 billion, compared with $36.4 billion in the third quarter of 2017. Analysts polled by FactSet had expected adjusted earnings of 28 cents a share on sales of $36.98 billion.
Better profits in North America thanks to a better product mix and “healthy” profits for Ford’s credit unit drove the earnings beat despite “continued international headwinds,” analysts at Goldman Sachs said in a note Thursday.
“However, with negative pricing in North America and given worse performance in Europe as well as continued issues in South America, we continue to see a downward slope to results,” they said.
The Goldman analysts kept their rating on Ford shares at neutral, and have a $9 price target, which implies a 1.5% upside for the stock.
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Third-quarter results will likely “help calm negative sentiment and falling expectations in the equity and credit markets at a time when the company is working hard to secure partnerships, finalize restructuring measures, and explore other value-enhancing exercises,” analysts at Morgan Stanley said in their note.
But the results were also not “the big inflection” for the stock, they said. Ford’s balance sheet “is holding together and no incremental evidence that would seem to threaten the dividend was presented,” they said.
Ford kept its 2018 earnings guidance of between $1.30 a share and $1.50 a share, but results “are likely to come in at the lower end of the range, and growth in ‘19 will be muted by tariffs,” said Garrett Nelson, an analysts at CFRA.
“Restructuring details remain scant, but we like Ford’s enhanced focus on higher-margin pickup trucks and SUVs,” Nelso said.
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Ford’s business “remains very strong in key areas,” Chief Executive Jim Hackett said in a statement Wednesday. “We continue to make progress on our efforts to redesign Ford to be far more competitively fit, disciplined in capital allocations and nimble enough to win in a fast changing world.”
Ford shares have lost 28% this year, which contrasts with advances of 0.9% and 0.7% for the S&P 500 index SPX, +1.86% and the Dow Jones Industrial Average. DJIA, +1.63%
