Investors expect big quarter following GM's results

Ford (F) earnings are set for release later today, a crucial report that follows blowout results from rival GM earlier this week.

Investors will have a close eye on the company’s full-year profits, which it forecast to come in around $11.5 billion in its latest quarterly report, as well as updated commentary on pricing dynamics in the industry after Ford cut prices on its Mustang Mach-E EV earlier this week.

For the company’s headline sales and earnings figures, Wall Street expects Q4 revenue to come in at $40.6 billion with adjusted earnings per share totaling $0.62, according to estimates from Bloomberg.

The revenue figure would represent a 15% jump compared to a year ago, where Ford was still struggling with component and chip shortages.

The street is expecting Ford to have a strong quarter following GM’s monster Q4 performance, where the automaker reported a huge profit beat and record revenue. GM also hit the top end of its full-year 2022 EBIT forecast, and also guided its full-year 2023 higher than analysts were expecting, seeing $11.5 billion in EBIT this year.

Last quarter Ford reiterated its full year 2022 EBIT forecast of $11.5 billion, and investors will be on the lookout for where 2023 guidance will land. The consensus estimate for Ford’s 2023 EBIT is around $10 billion.

Investors will also keep a close eye on margins and the impact of any pricing pressures the automaker is facing. Analysts are expecting margins to be around 7% for 2022, but that figure could be under pressure following Ford’s decision to cut prices on its Mustang Mach-E EV by 6-8%, following deep price cuts Tesla initiated for its competing Model Y SUV.

Last quarter, Ford CFO John Lawler noted some of customers were hesitating at higher sticker prices, and using longer-term loan financing to ease monthly payments. Lawler also said Ford was seeing customers passing on higher trim levels in order to purchase more affordable vehicles.

Investors will be watching for any more color on demand issues creeping up for Ford due to slower macro conditions and higher interest rates. Earlier this week GM said it did not see a demand problem for its vehicles at this time, and was bullish about its upcoming EV rollout in 2023.