The balance sheets on the American stock exchanges continue to come in full swing. The stock market really reacts surprisingly badly to some balance sheets. I will focus on two examples. One of them is ARM, as you know ARM is a very successful company in microchip design. It went public last year. The stock has done very well since it went public. It is a stock that I find very expensive. The price-earnings ratio is 111. I also see some other risks that I will talk about in a moment. But the market did not listen to me, to be honest, and the stock has done very well so far. It has increased by 40% since the beginning of the year. But the market did not love the balance sheet that came. In fact, the balance sheet is quite good, but the future expectations did not seem enough to people. For example, he said he expected a turnover of between 1.175 and 1.275 billion dollars for the next quarter. Wall Street was expecting 1.221. Actually, it is not different from what Wall Street expected, but as far as I understand, Wall Street is being a bit coy. They are saying we are expecting 1.221, but you should say a little more. Because your price gain is very high, you are hovering around 111. That's why they didn't like it. The company stated that it expected between 48 and 56 cents in profit per share, the stock market expectation was around 52 cents. That was still not enough for the market. In other words, they didn't find the estimates high enough, investors were not very excited, excitement was diminished. As a result of all this, ARM shares fell and continue to fall. However, the balance sheet was actually very strong.
As you know, ARM designs and then rents out the copyrights of those designs. The income from this was 580 million dollars, the expectation was around 568 million dollars. License income was 403 million dollars, which is also very good. It earned a total income of 983 million dollars. Last year, the same figure was 949 million dollars, there is a 19% increase here. But as I mentioned, the market looked a little more into the future and those expectations were not enough for the market. Of course, as is very fashionable these days, ARM also focused a lot on artificial intelligence. He said that we expect great developments in artificial intelligence agents. He said that we expect developments in small language models. There is a reference to DeepSeek here. He said that artificial intelligence that does not need the cloud, especially in mobile phones, personal computers and even cars, will develop a lot. In this context, Qualcomm's balance sheet has also arrived. It also makes similar devices. In fact, the design license of some of Qualcomm's devices belongs to ARM. Qualcomm has also fallen in a similar way, despite bringing a very good balance sheet.
Maybe those of you who know, ARM is also a part of the Stargate project. There is talk of a $500 billion investment there. ARM chips will be used there. At the same time, Softbank, which is a major partner of ARM, is also a partner there. As you know, the owner of Softbank, Masayoshi Son, is a gentleman that I approach with some suspicion. He had done unusual things at WeWork before. I don't want to go into those details too much now. He still holds a large portion of ARM's stocks. That's why I stay away from the stocks a little, this is not an investment recommendation. The stock may go up but I don't want to be in a company where this guy is a very strong partner. The expectation is that Masayoshi Son may also sell some Arm shares to finance Stargate. These are also what keep me away from ARM a little. That's why investors also have very high return expectations. When that doesn't happen, they punish the stock.
Another company that brought a very good balance sheet but was punished severely due to future expectations was Ford. Ford expects its adjusted earnings before interest and taxes, or ebit, to be between $7 and $8.5 billion in 2025. Last year, this was $10.2 billion. The market expectation for this year was $8.3 billion. When all these estimates fell short, the stock was also punished severely. Ford's CEO James Farley also emphasized customs duties. He said that if those 25% customs duties are really imposed on Mexico and China, this will also negatively affect us. Because Ford does very serious production in Mexico. They also manufacture in China and on the other hand, a part of their supply chain is based in China. This will affect us very negatively. He said that billions of dollars of profits could be lost in the automobile sector. Of course, he is also sending a message to Donald Trump here. Sales reached 48.3 billion dollars in the fourth quarter. This is a 2% increase compared to the same period last year, which is actually a very low increase, but it is still above expectations. The expectation was 47.4 billion dollars. Adjusted earnings per share were 39 cents. The expectation was 34 cents, they were well above that.
On the other hand, electric cars continue to be Ford's problem. Ford's electric vehicle unit, Ford E, announced a loss of $1.39 billion this quarter. This was $1.57 billion in the previous period. In other words, it is a bit more positive, but it still seems like Ford will lose between $5-5.5 billion in electric vehicles for 2025. The stock level in US dealerships has increased from 81 days to 103 days. This is of course worrying, Ford seems to have dumped a lot of vehicles on dealerships. The company's CFO said that they are ruthlessly focusing on costs. Everyone in the automobile sector is struggling right now, Tesla is struggling too. Tesla has a problem. As you know, Elon Musk is meddling in the politics of the whole world. That's why he is getting a lot of backlash. For example, we know that sales in Germany have halved compared to last year, Tesla is also. That's why Tesla is creating its own problem, but the pressure created by China is very important here. This is also reflected in Ford, and when customs duties came into play, investors preferred to sell their shares.
The information, comments and recommendations contained herein are not within the scope of investment consultancy. Investment consultancy services are provided within the framework of the investment consultancy agreement to be signed between brokerage firms, portfolio management companies, banks that do not accept deposits and customers. The comments in this article are only my personal comments and these comments may not be appropriate for your financial situation and risk return. For this reason, investments should not be made based on the information and comments in my articles.
