Ford sold fewer cars, lost money on electric ones and still beat Wall Street's number. Across the Atlantic, Stellantis earned 0.7 cents on every dollar of sales, and its stock jumped 13%. Neither company is in our model books. We read both for the car buyer. Ford just said what it expects prices to do, and Stellantis flagged a new cost on the way.
Ford (F) earned $2.05 billion in the third quarter, or 50 cents a share. A year earlier it earned $2.45 billion, or 60 cents. Revenue fell to $49.53 billion from $50.53 billion. Analysts had expected less on both counts, so the quarter counted as a beat. Vehicle sales fell 6.6%, mostly because Ford stopped making the Escape and the Lincoln Corsair. The electric unit, Model e, saw revenue drop 31% to $1.2 billion. Ford's answer is a $30,000 electric pickup due next year. The shares rose 24 cents to $11.95 on Wednesday, Oct. 28.
Two lines in the report speak to buyers. Ford Credit, the arm that lends you the money for a Ford, grew pre-tax earnings 27% to $803 million. And Ford raised its view of pricing. Its outlook now assumes U.S. car prices across the industry rise about 1% this year, double the 0.5% it assumed before. It also lifted the low end of its full-year operating profit forecast by $500 million, to $10.5 billion to $11 billion. Chief Executive Jim Farley said the company is working toward an 8% margin by 2029.
Stellantis gets paid for keeping its word
Stellantis (STLA), the maker of Jeep and Ram, didn't raise anything. It confirmed its full-year guidance, a mid-single-digit rise in revenue and a low-single-digit margin. The third-quarter margin was 0.7%. Revenue was 37.61 billion euros, up 1.1%, and shipments fell 1.1% to 1.29 million. Adjusted operating income of 256 million euros beat the 211 million analysts expected. Free cash flow was negative by 4 billion euros, and the company is guiding to a positive number in 2027. The stock jumped 13% to $4.68 anyway. The Journal's Dominic Chopping reports a $70 billion plan that puts 70% of product spending into Jeep, Ram, Peugeot and Fiat. It also aims for 6 billion euros a year in cost savings by 2028. One warning stood out. Stellantis expects higher costs from memory chips in the fourth quarter. The chip squeeze in this week's papers reaches the car lot too.
Our read
Cash Flow, M5. Neither Ford nor Stellantis is in our model books. A 13% jump on a 0.7% margin is a bet on a turnaround, and turnarounds take years. The buyer's lesson sits in two numbers. Ford's outlook has industry prices up about 1% this year. Its lending arm earned 27% more before taxes. When you finance a car, you pay for both. The price and the interest come out of the same monthly payment.
Here's the check this week. If a car is anywhere in your next 12 months, find the line in your budget you've set aside for it. Ford's outlook has prices up only about 1%, so the sticker isn't racing away. It is still going up, though, so don't plan on a discount. The loan usually costs more than a small price bump. Get a rate quote from your bank or credit union before you visit a dealer, so the dealer's financing has a number to beat. If an electric truck is on your list, Ford says its $30,000 pickup is due next year. Put that date on the calendar too. You check the weather before the drive, and the rate before the lot. Bring both numbers to your next review and we'll fit them to the plan.