Ford Tops Earnings Expectations, But Lowers Guidance for 2019

Auto manufacturer Ford Motor topped earnings expectations for the third quarter, but the company also tamped down over-exuberant profitability forecasts for the future as it lowered its earnings guidance for the rest of 2019.

Earnings as reported by CNBC:

  • Adjusted earnings: 34 cents per share vs. 26 cents expected.
  • Automotive revenue: $33.93 billion vs. $33.98 billion expected.

“The third-quarter results do have evidence of the global redesign of Ford,” CEO Jim Hackett said Wednesday on a call with investors. “Make no mistake, humility of the work that we still have to do, I’m still very confident of the team here and the progress that Ford Motor Co. is making. We’re focused on improving our fitness and our outcomes.”

Ford, in particular, is wary of competition overseas as well as declining consumer demand in countries like China. Shares of Ford fell as much as 7% in Thursday’s trading session despite the earnings beat.

“From a key takeaway standpoint, we think Q3 was a good quarter,” said Ford CFO Tim Stone. “The progress we’ve made also indicates we have more work to do, more opportunity ahead but it’s a good start for the year.”

Transportation ETFs to Consider

As Ford alluded to in its future earnings guidance, the trade wars between the two largest economies have certainly been a negative factor for many sectors, and the transportation industry wasn’t immune to its effects. However, any weakness in the transportation sector could present an opportunity for investors who sense a buy-the-dip opporunity.

For investors who want to make a move on the transportation sector, here are three ETFs to consider:

  1. iShares Transportation Average ETF (NYSEArca: IYT): seeks to track the investment results of the Dow Jones Transportation Average Index composed of U.S. equities in the transportation sector. The underlying index measures the performance of large, well-known companies within the transportation sector of the U.S. equity market.
  2. SPDR S&P Transportation ETF (NYSEArca: XTN): seeks to provide investment results that correspond generally to the total return performance of an index derived from the transportation segment of a U.S. total market composite index. The index represents the transportation segment of the S&P Total Market Index (“S&P TMI”).
  3. Direxion Daily Transportation Bull 3X Shares (NYSEArca: TPOR): seeks daily investment results equal to 300 percent of the daily performance of the Dow Jones Transportation Average. The index measures the performance of large, well-known companies within the transportation industry.

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