NEW YORK (TheStreet) --Shares of Ford Motor (F) - Get Reportclosed lower by 8.16% to $12.71 on Thursday, after the company reported unimpressive 2016 second quarter earnings results before the market opened today. The automotive company posted earnings of 52 cents per share, below estimates of 60 cents per share. Revenue came in at $39.49 billion, above the projected $36.31 billion.
With the earnings results and the stock indicating a potential decline in the auto industry the question of raising incentives and how subsequent incentives impact not only manufactures, but dealers as well, was discussed on CNBC''s "Closing Bell" this afternoon.
Adams Automotive Group Missouri president Scott Adams joined the program to explain how incentives impact dealerships, as well as provide his forecast for the auto industry.
"Most people don't realize that when a factory has incentives, the dealer has to pay that first to the customer to lower the price of the car or the truck that they're buying," Adams explained
Additionally, he noted that after dealers make said payments they have to wait for a period of time before manufactures refund dealerships, highlighting incentive's overall burden.
Zeroing in on Ford and incentives within the business, Adams believes incentives are increasing but you have to look at where.
"I think incentives are on the up, but if you listen to what Mark Fields (CEO of Ford) said it is exactly what I was going to say, that it's in the car market, not trucks, not sport utilities," Adams said.
Finally, Adams provided CNBC with his outlook for the remainder of the year for the auto industry, which may sound more optimistic than others have projected.
"I think it's probably better than what people are thinking. The largest Ford plant in the world is here in Kansas City and that plant is running full blast pushing out trucks, and Toyota (TM) are selling all the trucks that it can get. It's certainly not bad, it may not be perfect, but it's really pretty good," Adams stated.
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Separately, TheStreet Ratings rates Ford as a "Buy" with a ratings score of "B-." This is driven by a few notable strengths, which TheStreet Ratings believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks TheStreet Ratings covers.
The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels, good cash flow from operations and impressive record of earnings per share growth. TheStreet Ratings feels its strengths outweigh the fact that the company has had generally high debt management risk by most measures that TheStreet Ratings evaluated.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: F