Ford Motor Company reported strong first-quarter earnings, exceeding Wall Street’s expectations. The company’s commercial vehicle division performed exceptionally well, and hybrid vehicle sales surged. Ford anticipates achieving the higher end of its annual earnings before interest and taxes (EBIT) guidance of $10 billion to $12 billion. Despite these positive results, Ford acknowledges the challenges in its electric vehicle production, with CEO Jim Farley describing it as a “huge drag” on the industry. The company recorded a $1.3 billion operating loss in its EV and software division for the quarter and projects a pre-tax loss of $5 billion to $5.5 billion for the year. To ease customers into a battery-powered future, Ford prioritizes hybrid vehicles, aiming to increase sales by 40% this year and quadruple them in the coming years. Farley has adjusted Ford’s EV ambitions to align with consumer demand, delaying the launches of three-row EVs and the next-generation electric pickup truck. Ford expects EV production costs to decrease, but anticipates intense pricing pressure from competitors. The company is also pivoting towards producing larger electric trucks and SUVs, as well as more affordable and smaller EVs. Despite a 13% decline in quarterly revenue from its gas-engine business, Ford’s strong commercial business remains a key profit driver. The company is optimistic about software-related services in this division, expecting them to contribute significantly to future profits. Ford posted adjusted earnings of 49 cents per share for the quarter, outperforming analysts’ estimates of 40 cents per share. The automaker’s performance mirrors that of General Motors, which recently reported strong quarterly results and raised its annual forecast, citing stable pricing and demand for gasoline-engine vehicles.
Ford Beats Expectations, Focuses on Hybrids amid EV Challenges
