Ford plunged nearly 20% on Thursday after the company missed Wall Street’s profit estimates — leading to the worst single-day stock decline for the automotive giant in nearly two decades.
The Detroit-based car manufactured revealed late Wednesday a second-quarter operating profit of $2.8 billion, down 26% from $3.8 billion in the second quarter of 2023, as it struggles with quality-related costs and stiff competition in its EV business.
Operating profit fell far below analysts’ expectations of $3.7 billion, according to FactSet.
The stock fell 18.4%, to $11.16, its worst day since 2008.
The company’s traditional car business, Ford Blue, brought in an operating profit of $1.2 billion – better than this year’s first quarter results but below estimates.
Ford’s results have been hit hard by high warranty costs, which were up $800 million since the first quarter, putting the expense at around $2 billion, or 4% of sales.
The company’s EV business lost $1.1 billion — less than it lost the previous quarter and less than the traditional business.
Ford’s commercial business earned $2.6 billion, less than the $3 billion it reported in the first quarter.
Ford still maintained its overall 2024 guidance, though, and expects to earn about $11 billion by the end of the year.
Meanwhile, General Motors and Stellantis also fell Thursday, dropping 5% and 7.7%, respectively.
GM — which owns brands including Chevrolet, Buick, GMC and Cadillac — reported second-quarter results Tuesday that beat Wall Street expectations.
The automaker even raised its guidance for the year, but investors reportedly feared the success would be short-lived.
Stellantis — which owns Maserati, Jeep, Fiat and Chrysler — reported Thursday a net profit of $6.1 billion during the first half of the year, down 48% from the same period last year.
“This is a very tough industry, a very tough period and everybody has to fight for performance,” Stellantis CEO Carlos Tavares said. “We will have to work hard to deliver that performance.”
Tesla, meanwhile, rebounded a day after plummeting around 12% — the EV maker’s largest daily decline since 2020 — after the company reported its lowest profit margin in more than five years and missed second-quarter estimates.
The stock was up 2%.
