Shares of Ford Motor Co. rallied by 2% during Thursday’s pre-market trading after the company beat most analysts estimates for their third-quarter earnings report.
The American automobile maker reported earnings of $0.43 per share higher than their earnings of $0.26 per share during the same quarter last year and beating most analysts forecasts of $0.32 per share.
For the three months that ended in September, Ford’s revenue was also from $33.3 billion during the third quarter last year to $36.45 billion. Most estimates forecasted a decline in their revenue to $32.74 billion.
The rally in the stock of Ford Motors led the Dow Jones to trade 0.10% higher. According to Ford’s earnings report, the company’s sales of their F-series pickup trucks in the United States were up by 14% for the third quarter with buyers recorded to have paid an average of 445,400 each truck which is higher by $2,800 from the same quarter last year. However, Ford reported a decline of two percent for its overall car sales to 1.5 million cars and trucks combined.
Ford chief financial officer Bob Shanks stated that more buyers are opting for the vehicle’s luxury packages which include options for backup cameras or heated seats. Ford chief executive officer Jim Hackett which just began his term a couple of months marks their most recent quarterly earnings report as his first full quarter after former CEO Mark Fields was ousted from the position earlier this year.
This quarter, Ford announced its plans to cut around $14 billion from its operating costs by the year 2022 which will help them achieve better deals with their suppliers. The company which also aims to decrease the time of each product development also aims to reduce the overall costs of their materials by coming up with simpler designs and more shared parts. These efforts are also expected to cut the costs of their engineering department.
Ford also intends to cut at least one-third of its engine development expenses by redeploying them to electric and hybrid vehicles, a feat which has been getting a lot of attention recently following Tesla’s popularization of the autonomous vehicles.
Other American automobile makers such as General Motors have also announced their intention to produce electric cars and autonomous vehicles adds to the competition Ford is currently facing.
Ford also raised its full-year earnings forecasts to between $1.75 to $1.85 per share from having previously forecasted their full-year earnings to come at around $1.65 to $1.85 per share.
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