Ford earnings: Automaker surpasses Q4 income forecasts; 2024 profit expectations exceed projections

Ford stock (F) surged in after-hours trading following the company’s announcement of fourth-quarter sales that significantly exceeded expectations. Additionally, the automaker projected a full-year profit outlook that surpassed estimates, despite expecting more losses for its EV unit. These results come after GM (GM) reported robust results and profit guidance, indicating overall strength in the US auto sector last week. Ford recorded top-line revenue of $46 billion, beating the estimated $40.35 billion by Bloomberg. This is $2 billion higher than a year ago, despite the lingering effects of the United Auto Workers (UAW) strike in early Q4. In terms of profitability, Ford reported adjusted earnings per share of $0.29, surpassing the estimated $0.13, and recorded adjusted EBIT of $1.1 billion, exceeding the expected $988.2 million. For the year, Ford achieved $10.3 billion adjusted EBIT, at the higher end of its full-year 2023 adjusted EBIT outlook of $10 billion to $10.5 billion. Ford reinstated its 2023 profit outlook following the ratification of its labor deal with the UAW. As for its 2024 full-year outlook, Ford projected adjusted EBIT of $10 billion to $12 billion, which was lower than Ford’s pre-UAW strike 2023 profit outlook of $11 billion to $12 billion but higher than the estimated $9.24 billion. Ford rival GM issued a 2024 profit guidance that matched its initial pre-UAW strike outlook for 2023.
Ford also declared a first quarter regular dividend of $0.15 per share and a supplemental dividend of $0.18 per share.
Ford CFO John Lawler stated that Ford will enhance capital efficiency by selectively reducing investments and increasing expected returns for new initiatives to improve total adjusted return on invested capital from about 14% in 2023 to 20% over the next couple of years. He emphasized that “Simply ‘good’ isn’t good enough, and investments are going to projects that have credible plans to deliver their targeted returns.”Last year, Ford divided into three business units: Ford Blue for the traditional gas-powered business, Ford Model e for the EV division, and Ford Pro for its commercial and Super Duty truck business. Across these business lines, Ford reported the following for Q4:2024 Mustang Mach-E electric vehicles are displayed at a Ford dealership Sunday, Jan. 21, 2024, in Broomfield, Colo. More than 4,700 auto dealerships across the United States signed a letter to President Joe Biden on Thursday, urging the president once again to halt Environmental Protection Agency efforts to enforce stricter vehicle standards, weeks ahead of the agency’s ruling on its tailpipe emissions proposal. (AP Photo/David Zalubowski) (ASSOCIATED PRESS)
“We believe there has been a significant shift in the past 6 months,” Ford CEO Jim Farley stated on the conference call concerning the US EV market, where customers are hesitant due to higher prices. The investment in EVs this year will fund the development of next-gen EVs. “Our next gen-2 products will be profitable in the first 12 months of their launch,” Farley added, also indicating that the company would focus more on making smaller, profitable EV products. Farley also revealed that Ford has had a “skunk works” team working internally on creating a low-cost EV platform, hinting at a rival to Tesla’s upcoming $25,000 EV.Read more: Buying a car? Here’s how to shop for insuranceEarlier in January, Ford moved 1,400 workers off F-150 Lightning EV production and reduced a shift as the company adjusted supply to what appears to be slowing demand for the well-received but highly-priced EV pickup. “We continue to see growth, just at a slower pace. We’re adjusting to that growth,” Ford Model e spokesperson Martin Günsberg said to Yahoo Finance.With regard to Ford’s Model e business, last quarter, Ford stated the company would “push out” $12 billion in EV investments when that capacity is needed. Ford also delayed the construction of its new battery plant in Michigan and scaled back battery output. The factory is still scheduled to open in 2026.Ford also saw declining sales of its EVs in January of this year, with EV sales dropping over 10%, mainly led by decreasing sales of the Mustang Mach-E, which lost federal EV tax credit eligibility on Jan. 1. The company did see overall auto sales climb, however, with hybrid sales jumping over 40%. Ford has said it will push to bring more hybrids to the market to meet customer demand.Unsold 2024 F150 Raptor pickup truck sits at a Ford dealership Sunday, Jan. 21, 2024, in Broomfield, Colo. (David Zalubowski/AP Photo) (ASSOCIATED PRESS)Ford’s strength in January continued the positive trend seen in 2023. Last month, the company reported US total sales jumped 7.1% to approximately 1,995,912 vehicles, making 2023 the automaker’s best year since 2020. Ford noted strong sales in its trucks business, with 1,081,777 trucks and vans sold in 2023 — up 13%. Across its nameplates, Ford saw notable growth in the Bronco Sport (up 28.1%), Edge (up 24.1%), and Lincoln Navigator (up 32.9%), among others. Ford’s sales of hybrids and EVs were also a highlight, with sales up 25.3% and 17.9% in 2023, respectively.
Farley also mentioned on the conference call that he believes 25% of all F-150 pickup sales could be hybrids in the near future and that the company was currently building hybrids “at capacity.”Correction: A previous version of this article misstated the first name of Ford CFO John Lawler. We regret the error.Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click hereRead the latest financial and business news from Yahoo Finance

Author: OpenAI