No pick-up in the Ford stock price as Q1 earnings call dissapoints

Summary:

US-listed auto giant Ford (F) slashed its projected Q2 production numbers as the global semiconductor shortage continues to weigh heavily

US-listed auto giant Ford (F) slashed its projected Q2 production numbers as the global semiconductor shortage continues to weigh heavily on vehicle manufacturers.

Coming fresh off the heels of Intel Corp’s dire assessment of the bottle-neck facing chip manufacturers, Ford was next in line to prepare the market for a tougher trading environment in the months to come. Ford stock price reacted as you would expect, shedding $4% in after-hours trading, sending the share lower by $0.43 to $12.0

Q1 ADJ EPS came in at $0.89c vs. estimates of $0.20

Q1 revenue also beat, at $33.6 Billion vs. estimated $31.3 Billion

Whilst the historical dataset was better than analysts had expected. No one had prepared for just how dismal a picture the forward guidance would paint.

Talking on the current chip shortage, CFO John Lawler had this to say:

“Semiconductor availability, which was exacerbated by a fire at a supplier plant in Japan in March, will get worse before it gets better. Currently, the company believes that the issue will bottom out during the second quarter, with improvement through the remainder of the year.”

The severity of the situation for the Ford stock price was reinforced as the Auto-Maker marked down projected revenues for the second quarter by $2.5 billion, to between $5.5 Billion and $6.5 Billion.

Ford Stock Price Prediction

After rallying 11% in the seven months following the March 2020 lows, to the recent high of $13.62, the stock had trended lower in a descending channel of lower highs and lower lows. With the most recent of those lows $11.18 on the 21st of April.

Since then the Ford stock price had rallied 13%, finishing yesterday’s main trading session at $12.43, above the relative safety of the 50-Day Moving Average at $12.29.

As the daily chart shows, the Ford stock price met resistance at a descending trend line at $12.56, in place from April’s ATH.
Basis the after-hours performance, we are likely to open today’s session below the 50-Day which could signal that deeper declines could be set to follow.

Given the negative outlook, shorts could look to enter positions below the moving average. The initial target is the 100-Day moving average which comes in $11.12, just a few cents below the April 21 low print at $11.18.

A close back above the 50-Day would negate the immediate bearish outlook.