F Stock Spikes 4% after Ford Reports Surprising Profits in Q2 2021


Ford recorded an automotive revenue of $24.1 billion, against $23 billion expected by analysts according to a survey conducted by FactSet.

Ford Motor Company (NYSE: F) stock traded around $14.40, up nearly 4% during the extended trading session. The notable spike in Ford stock has been attributed to the unexpected profits recorded in the second quarter (Q2) of 2021. According to the company, the second quarter was marred with chip shortages but the team managed well.

“Despite the many headwinds from the semiconductor shortage, some of which were unique to Ford, our team skillfully managed our business,” Chief Executive Jim Farley said at a conference call with investors. “I can tell you that this outcome was far from certain at the beginning of the quarter.”

During the second quarter of 2021, Ford recorded an automotive revenue of $24.1 billion, against $23 billion expected by analysts according to a survey conducted by FactSet. The adjusted earnings per share for the second quarter came in at 13 cents per share.

Most importantly, Ford raised its earnings guidance for the year noting a spike in demand for new vehicles like the Ford Bronco SUV. However, the company said that there has been a shortage of semiconductor chips that disrupted its production line.  On a positive note, the company said that the supply is improving.

During the second quarter, Ford said that it lost production of about 700,000 units due to unavoidable conditions.

On a full-year basis, the company expects the adjusted earnings before taxes to rise by $3.5 billion to between $9 billion and $10 billion. Additionally, the company said that it expects sales volume to rise by approximately 30% during the second half of the year. This will mostly be driven by favorable market factors according to the company.

Ford Stock and Company’s Q2

Ford stock has significantly benefited from the ongoing coronavirus pandemic. Besides, the company was directly involved in the production of major medical equipment needed to help stabilize the pandemic. Aside, the demand for new vehicles has increased, especially off-road vehicles to enable people to visit all-terrain places.

Notably, F stock has added approximately 100%, 57%, and 11.5% in the past year, seven months, and three months respectively through Wednesday. According to metrics provided by MarketWatch, Ford has a reported market valuation of approximately $55.04 billion with 3.92 billion outstanding shares.

The company is moving fast to venture into the electric vehicle industry that has been dominated by Tesla Inc (NASDAQ: TSLA). The company has set a timeline and allocated resources to shifts its production to all-electric vehicles in the foreseeable future.

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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.
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