F Stock Up 2.82% in Pre-Market, Ford Reports Better Than Expected Q2 Earnings Results

UTC by Steve Muchoki · 3 min read
F Stock Up 2.82% in Pre-Market, Ford Reports Better Than Expected Q2 Earnings Results
Photo: Ford Motor Company / Instagram

Ford (F) stock gained 2.82% in pre-market to trade around $6.93. This stock movement is attributed to better-than-anticipated Q2 earnings results.

After closing the market with a loss of 2.60% yesterday, Ford Motor Company (NYSE: F) stock jumped a leap higher in the pre-market to trade around $6.93. The leap is being attributed to the Q2 results just released by Ford, which beat Wall Street earnings expectations.

Ford stock has experienced heightened volatility since the beginning of the year, mostly instigated by the coronavirus pandemic.

During the early days when coronavirus was declared a global pandemic, most industries were shut down since little was known about the disease. As countries locked down people and minimized their movement through initiating social distancing rules, markets turned to a likely recession scenario. With time, people reduced outdoor activities, which the company benefits from as it offers great machines like the Bronco family for off-roading.

As the demand drastically fell, Ford stock followed the path. In less than two months, the F stock value dropped to a decade low.

However, as the coronavirus infection rate got to manageable levels, and biotech companies pushed fast to develop a vaccine, companies and markets began reopening slowly, especially in different parts across America.

Studying its past historical stock metrics, year to date they have shed 27.53%. However, for the past three months, they have added 36.99%.

Although not fully recovered, the company is pushing to see its investors get a reward despite the pandemic.

Ford Q2 Earnings Report

The company performed far better than Wall Street expected during the second quarter. It reported a profitable quarter with less operational losses than anticipated, even beating its own expectations.

For the past three months, the company reported adjusted earnings per share loss of 35 cents per share, against an anticipated loss of $1.17 per share.

In addition, the company reported automotive revenue of $16.6 billion against $15.95 billion.

Ford CFO Tim Stone warned investors back in April that the company anticipated losing more than $5 billion, on an adjusted pretax basis, during the second quarter as the pandemic shuttered factories and severely hampered auto sales.

During the three months period, the company reported an adjusted pretax loss of $1.9 billion – more than $3 billion better than expected.

In terms of cash burn, the company burned through $5.3 billion during the second quarter, up from $2.2 billion during the first quarter. The automaker said it ended the second quarter with automotive liquidity of $39.8 billion.

Having reported better than expected results, the company will be in a better position to tackle the remaining uphill to recovery.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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