- Ford shares tanked as much as 8.5% in early Wednesday trading, setting the automaker’s market cap to less than one-fourth of Tesla’s soaring valuation.
- Ford announced quarterly earnings on Tuesday afternoon that fell below analyst estimates. The company also lowered its 2020 profit forecast.
- The legacy automaker is now worth about $115 billion less than Tesla as Ford aims to introduce its electric-vehicle rival in early 2021.
- Watch Ford trade live here.
Ford announced fourth-quarter earnings on Tuesday afternoon that missed profit estimates and lowered the company’s earnings expectations for 2020. The company’s new earnings guidance assumes the slowest growth within the automotive industry, according to Bloomberg data.
The earnings miss drove Ford’s market cap down about $3 billion in early trading, leading the company to now be worth about $115 billion less than electric-vehicle rival Tesla. The electric car manufacturer has notched numerous record-high stock prices in the new year, and shares have more than doubled since early January.
Ford opened Wednesday with a market cap of roughly $33.3 billion. Tesla opened lower on Wednesday, touting a valuation of about $148.4 billion.
Here are the key numbers:
Automotive revenue: $36.7 billion, versus the $36.3 estimate
Adjusted earnings per share: 12 cents, versus the 17 cents estimate
2020 adjusted earnings forecast: $5.6 billion to $6.6 billion, versus the $7.37 billion estimate
“Financially, the company’s 2019 performance was short of our original expectations, mostly because our operational execution — which we usually do very well — wasn’t nearly good enough,” Ford CEO Jim Hackett said in the earnings report. “We recognize, take accountability for and have made changes because of this.”
Ford’s new electric Mustang Mach-E is poised to compete with Tesla’s Model Y when deliveries begin in early 2021, though the younger automaker has a distinct first-mover advantage in the space. Ford executives expressed regret around the late rollout of its flagship electric car and higher costs linked to its upgraded F-150 pickup line.
“We can’t miss a beat now in the product launches,” Hackett said in a call with analysts.
While Ford lags in entering the expanding EV market, Tesla is accelerating the rollout of its Model Y and boosting its delivery expectations for 2020. The automaker plans to begin Model Y deliveries by the end of March, and annual vehicle sales should “comfortably exceed” 500,000, CEO Elon Musk announced in the company’s January 29 report. The total delivery guidance reflects a 36% increase from Tesla’s 2019 total, and dispels past fears that the company would remain mired in production.
Tesla shares have been on a tear through 2020, establishing the 17-year-old company as the highest-valued US automaker on January 8. The stock is already up more than 30% in the week starting February 3, burning short-sellers and leading some analysts to downgrade Tesla on its rapidly escalating valuation.
Ford closed at $9.18 per share on Tuesday, down 0.8% year-to-date.
The company has eight “buy” ratings, 12 “hold” ratings, and two “sell” ratings, with a consensus price target of $10.10, according to Bloomberg data.
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