Why Ford’s stock is surging while GM shares are flat after Q3

DETROIT – Both Ford Motor and General Motors beat Wall Street’s expectations for the third quarter but shares of GM are flat as Ford’s stock surged to a new 52-week high during trading Thursday morning.

On the surface, results for both automakers were similar. They easily beat the earnings consensus from analysts and slightly topped revenue expectations. They also both partially raised 2021 guidance. But looking deeper into the results and comments from executives, Ford made better progress and painted a more optimistic outlook than GM, according to analysts.

The results pushed Ford’s shares up by as much as 13% to $17.58 a share during trading Thursday. That compares with GM’s stock up by as much as 2.4% to $55.58 a share. GM’s market cap is about $80 billion compared with Ford’s at $66 billion.

The differences between the third-quarter earnings reports ranged from outlooks on earnings and the ongoing shortage of semiconductor chips to their autonomous vehicle businesses and stock dividends.

Here’s more on those topics and others following the Wednesday earnings results from America’s two largest automakers.

Ford beat Wall Street’s estimates more than GM did. It also reported a smaller decline in net income than a year earlier, when consumers flocked to dealerships after the easing of lockdowns and stores reopening after closing due to the coronavirus pandemic.  

Ford reported adjusted earnings per share of 51 cents versus 27 cents expected based on average analyst estimates compiled by Refinitiv. Its automotive revenue was $33.21 billion versus expectations of $32.54 billion. Its net income for the quarter was $1.8 billion, down 25% from a year earlier.

GM reported adjusted earnings per share of $1.52 versus 96 cents expected from Refinitiv. Its revenue was $26.78 billion versus $26.51 billion expected. Its net income for the quarter was $2.4 billion, down by 40% compared with a year earlier.

“Yesterday’s large negative market reaction to GM’s solid 3Q but unchanged 2021 outlook, in our view, reflected some disappointment that GM didn’t boost its guidance amid improving industry conditions, and investor concerns that the soft implied 4Q Ebit represents a low exit rate going into 2022,” Deutsche Bank analyst Emmanuel Rosner wrote Thursday in an investor note.