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Why Ford Stock Lost 21% in February

By Demitri Kalogeropoulos - Mar 5, 2020 at 10:01AM

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Investors panned the carmaker's latest earnings results.

What happened

Ford (F -2.78%) shares underperformed a historically weak market last month as the stock shed 21% compared to an 8% decline in the S&P 500, according to data provided by S&P Global Market Intelligence.

The drop contributed to significant losses for investors in recent years, as shares are down more than 50% since early 2015.

A couple shops for a car.

Image source: Getty Images.

So what

February's slump was partly driven by fears of a global economic slowdown. But Ford added to the negative sentiment by posting disappointing earnings results. Vehicle volume fell 8% in the fourth quarter, the automaker said on Feb. 4, as market share ticked down. Its key financial metrics trended lower, too, with adjusted free cash flow holding flat and adjusted earnings diving by 67% to $485 million.

Now what

Ford is hoping to improve on its operational execution in the year ahead, especially in the competitive U.S. market. But management's 2020 outlook leaves the door open for another reduction in operating income this year even as the car company works to aggressively pivot toward new innovative products like hybrid-electric F-150 trucks and fully electric Ford- and Lincoln-branded vehicles.

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