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Ford (F) to Report Q3 Earnings: What's in the Cards?

Ford Motor Co.F is set to report third-quarter 2015 results on Oct 27. In the last quarter, the company had delivered a positive earnings surprise of 34.29%. Further, the automaker managed to beat earnings in three of the last four quarters with a positive average surprise of 17.70%. Let's see how things are shaping up for this announcement.

Factors Influencing This Quarter

Ford has been undertaking a number of initiatives to boost sales and earnings, such as rapid global expansion and capital deployment. The automaker's pre-tax results are anticipated to improve in 2015 as it plans to launch 16 vehicles during the year.

Moreover, Ford expects better results from all five geographic segments. Automotive revenues, operating margin and operating-related cash flow are also anticipated to be higher than 2014. These improvements will likely be reflected in the company's third-quarter 2015 results as well.

However, high competition and weak economic growth in the Euro area are expected to weigh on the automaker's results. Moreover, weakness in the Russian currency and economy will likely hurt results in Europe. Ford expects losses from South America this year, although results are anticipated to improve over 2014. The losses are expected due to the weak economic situation in the region.

Earnings Whispers

Our proven model does not conclusively show that Ford is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:

Zacks ESP: Ford has an Earnings ESP of -2.22%. This is because the Most Accurate estimate is pegged at 44 cents, while the Zacks Consensus Estimate stands at 45 cents.

Zacks Rank: Ford's Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some companies in the automobile sector you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Cooper Tire & Rubber Co. CTB has an Earnings ESP of +7.90% and a Zacks Rank #3. The company's third-quarter 2015 financial results are scheduled for release on Nov 2.

American Axle & Manufacturing Holdings Inc. AXL has an Earnings ESP of +1.49% and a Zacks Rank #3. The company is expected to release third-quarter 2015 earnings results on Oct 30.

Gentherm Inc. THRM has an Earnings ESP of +3.45% and a Zacks Rank #3. The company's third-quarter 2015 results are scheduled to release on Oct 29.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

FORD MOTOR CO (F): Free Stock Analysis Report

AMER AXLE & MFG (AXL): Free Stock Analysis Report

COOPER TIRE (CTB): Free Stock Analysis Report

GENTHERM INC (THRM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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