Ford Exceeds Q3 Earnings Expectations, but Electric Vehicle Segment Remains a Challenge
Ford Motor Company (F) announced strong financial results for the third quarter, surpassing analyst expectations. The Detroit-based automaker reported revenue of $46.2 billion, exceeding the consensus estimate of $41.88 billion, and earnings per share of 49 cents, beating the projected 47 cents. This marks a 5% year-over-year increase in total revenue.
Ford Blue, the company’s traditional vehicle segment, saw a 3% increase in sales to $26.2 billion despite a 2% decline in global wholesales due to the discontinuation of low-margin internal combustion engine vehicles. Meanwhile, Ford Pro, focusing on commercial vehicles, experienced a 13% year-over-year growth in sales, reaching $15.7 billion.
However, Ford Model e, the company’s electric vehicle segment, faced challenges. Sales fell by 33% compared to the previous year, and the segment reported an EBIT loss of $1.2 billion. Despite the loss, Ford highlighted improvements in the profit trajectory of its electric vehicle business, driven by cost optimization initiatives.
Looking Ahead: Ford Sets Ambitious Financial Goals
For the full year, Ford projects adjusted EBITDA of around $10 billion and free cash flow between $7.5 billion and $8.5 billion. Capital expenditures are anticipated to range from $8 billion to $8.5 billion. The company expects Ford Pro to generate an EBIT of approximately $9 billion for the year, while Ford Blue is projected to bring in about $5 billion. Conversely, Ford Model e is expected to incur a full-year loss of around $5 billion.
Ford’s CEO, Jim Farley, expressed confidence in the company’s strategic direction amidst industry transformation. He highlighted the company’s focus on key areas like commercial vehicles, international operations, software development, and next-generation electric vehicles. Farley emphasized the company’s commitment to cost reduction and quality improvement, aiming to drive future financial growth.
Stock Performance
Ford’s stock price was down about 7% year-to-date before the earnings release. Following the announcement, the stock dropped by 4.40% after hours, trading at $10.87 at the time of publication.
Moving Forward
Ford’s strong overall performance in the third quarter, particularly in its traditional and commercial vehicle segments, offers a positive outlook. However, the company’s continued struggles in the electric vehicle market remain a concern. The company’s plans for cost reductions and quality improvements in the electric vehicle segment will be critical to its success in this rapidly evolving market.
