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 companys traditional car business, Ford Blue, brought in an operating profit of $1.2 billion better than this years first quarter results but below estimates.
Fords 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 companys EV business lost $1.1 billion less than it lost the previous quarter and less than the traditional business.
Fords 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 makers 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%.
