Investors Skeptical of Ford Motor Company (F) Following Earnings Beat

Ford Motor Co. (ticker: F) topped Wall Street expectations with $2 billion in profit in the second quarter and raised its full-year guidance on Wednesday morning. However, shares dipped more than 2.3 percent in early trading as investors remain cautious on the U.S. auto giant in a softening auto market.

Ford reported adjusted earnings of 56 cents per share on revenue of $39.9 billion for the quarter. Both numbers beat consensus analyst estimates of 43 cents and $37.1 billion, respectively.

Ford also raised its full-year EPS guidance to range between $1.65 and $1.85.

Ford’s F-Series pickup truck sales were particularly strong. F-Series sales increased 7 percent from a year ago, the largest second-quarter jump since 2001. The average transaction price also rose $3,100 from a year ago.

“This quarter shows the underlying health of our company with strong products like F-Series and commercial vehicles around the world, but we have opportunity to deliver even more,” CEO Jim Hackett says.

“The entire team is focused on improving the fitness of the business and smartly deploying our capital to improve both the top and bottom lines in the quarters ahead.”

The earnings report was Hackett’s first since taking over as CEO from Mark Fields in May.

Weakness in Ford’s stock following the report may have more to do with the big picture of the global auto market than the company itself. U.S. auto sales have been down for four consecutive months.

Investor skepticism about the auto market has shares of Ford and rival General Motors Co. (GM) trading at some of the lowest valuations relative to earnings in the entire Standard and Poor’s 500 index. At a forward price-to-earnings ratio of 7.1, Ford could be a compelling value play for patient investors.

“Amid the most recent management changes at Ford, we find the opportunity for the stock to be intriguing,” Barclays analyst Brian Johnson said earlier this week. “While the ultimate success of new CEO Jim Hackett remains to be seen, we believe…

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