Ford shares plunged nearly 20% on Thursday after the carmaker missed Wall Street profit expectations, marking the auto giant’s worst one-day drop in two decades.
The Detroit-based automaker said late Wednesday that its second-quarter operating profit was $2.8 billion, down 26% from $3.8 billion in the second quarter of 2023, as it struggles with quality-related costs and fierce competition in its EV business.
Operating profit fell well short of analysts’ expectations of $3.7 billion, according to FactSet.
The stock fell 18.4% to $11.16, its worst day since 2008.
Ford Blue, the company’s traditional automotive business, Operating profit was $1.2 billion. – Better than the first quarter results this year, but below expectations.
Ford’s performance has been hit hard by rising warranty costs, which increased by $800 million from the first quarter to about $2 billion, or 4 percent of sales.
The company’s EV business lost $1.1 billion, smaller than the loss in the previous quarter and smaller than the loss from its traditional business.
Ford’s commercial business made $2.6 billion in profit, down from the $3 billion it reported in the first quarter.
But Ford is still maintaining its overall guidance for 2024, expecting profits of about $11 billion by the end of the year.
Meanwhile, General Motors and Stellantis shares also fell 5% and 7.7%, respectively, on Thursday.
GM, which owns brands including Chevrolet, Buick, GMC and Cadillac, reported second-quarter results on Tuesday that beat Wall Street expectations.
Although the company raised its outlook for the current fiscal year, investors are reportedly concerned that its success may not last.
Stellantis, which owns Maserati, Jeep, Fiat and Chrysler, It reported net income of $6.1 billion on Thursday. In the first half of this year, sales were down 48% compared to the same period last year.
“This is a very tough industry, very tough times, and everybody has to fight for performance,” Stellantis CEO Carlos Tavares said. “You have to work hard to get to that performance.”
Meanwhile, Tesla Inc. plunged about 12% — the electric vehicle maker’s biggest one-day drop since 2020 — after reporting its lowest profit margin in more than five years and missing second-quarter earnings expectations, but its shares recovered the next day.
The stock price rose 2%.
