Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Ford Motor Company Are Sagging Today

By John Rosevear - Oct 2, 2019 at 2:45PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Ford's third-quarter U.S. sales weren't great. Are investors getting worried?

What happened

Shares of Ford Motor Company (F -2.44%) were down on Wednesday after Ford said that its U.S. sales fell 4.9% in the third quarter on weak results for its SUVs and F-Series pickups.

As of 2:15 p.m. EDT, Ford's shares were down about 3.8% from Tuesday's closing price. The shares had been down as much as 5.1% in trading earlier in the day.

F Price Chart

F Price data by YCharts.

So what

Ford said that its SUV and car sales fell 10.5% and 29.5%, respectively, from a year ago, more than offsetting an 8.8% increase in truck sales. The overall U.S. light-vehicle market was roughly flat in the third quarter versus the year-ago period.

The drop in Ford's car sales was expected, as Ford has discontinued the Fiesta, Focus, C-Max, and Taurus models in the United States. The Focus and C-Max are already sold out; dealers have limited supplies of the others.

The decline in SUV sales was a little more worrisome. It was largely due to tight supplies of the all-new 2020 Ford Explorer, a result of a slow production ramp-up after quality issues were detected in early production examples. That will largely sort itself out in time, but analysts had expected Ford to have higher inventories of the new Explorer by now. (Ford said that the sell-down of the outgoing 2019 model is complete.)

A black 2019 Ford F-150, a full-size pickup truck.

Ford's F-150 was all new in 2015, and Ford has kept it fresh -- but brand-new rivals from FCA and GM are gaining ground. Image source: Ford Motor Company.

Finally, while Ford's truck sales were up, there are reasons for concern. Ford's commercial vans are doing well, but sales of its F-Series pickups -- a primary driver of profit for the company -- fell 6% in the quarter, losing ground to newer models from General Motors (GM -1.51%) and Fiat Chrysler Automobiles (FCAU).

Now what

Investors looking for perspective should remember that Ford's U.S. product portfolio is in transition. The Fusion and Mustang are the only Ford-brand cars still in production, as Ford is hoping to replace sedan sales with SUV sales -- but supplies of the new Explorer are still tight, and production of an all-new Escape has just begun.

Ford has more new SUVs on the way and an all-new F-150 pickup coming next year. It's not surprising that it lost some ground in the third quarter, but investors will want to hear that things are on track when Ford reports earnings on Oct. 23.

John Rosevear owns shares of Ford and General Motors. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ford Motor Company Stock Quote
Ford Motor Company
$16.03 (-2.44%) $0.40
General Motors Company Stock Quote
General Motors Company
$38.40 (-1.51%) $0.59
Fiat Chrysler Automobiles N.V. Stock Quote
Fiat Chrysler Automobiles N.V.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.