NEW YORK (TheStreet) --Ford Motors (F) - Get Report reported 2016 third-quarter earnings that beat analysts' expectations before Thursday's market open. The Detroit-based automaker posted earnings of 26 cents per share on revenue of $35.94 billion. Wall Street's projections had earnings of 20 cents per share on revenue of $33.80 billion.
Despite the top and bottom line beat, the company reported a drop in net income of 50% year-over-year because of costs related to a recall of faulty door latches.
"Part of this, what we're noticing, is the impact of lower expectations for the second half of this year," CNBC's auto industry reporter Phil LeBeau noted during Thursday morning's "Squawk Box."
LeBeau pointed to three factors negatively impacting Ford in the third-quarter.
"Super Duty launch, they have had a lot of costs that are involved there. F-series, as the stock changed compared to where they were last year when they were ramping up production. And then a $640 million hit on the increased warranty costs, that's due to a huge recall when it comes to door latches," LeBeau explained.
That said, he noted that there would not be overwhelming negative reaction concerning Ford stock.
"They already guided lower and they have had relatively cautious comments regarding the second half of this year regarding what to expect in the auto industry," LeBeau added.
Shares of Ford were retreating in early morning trading on Thursday.
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Separately, 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.
The team rates Ford Motor as a Buy with a ratings score of B-. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: F