Ford Motor Delivers Strong Q1 Results, Raises Outlook
Ford Motor Company (F) reported solid first-quarter earnings, exceeding analysts’ expectations and driving shares higher in after-hours trading. The automaker’s commercial business, particularly its Ford Pro unit, played a significant role in the positive results.
Automotive Revenue and Earnings
Ford’s automotive revenue increased slightly by 2% year-over-year to $38.89 billion, slightly below analysts’ estimates of $40.1 billion. Adjusted earnings-per-share (EPS) reached 49 cents, surpassing estimates of 42 cents. However, automotive earnings before interest and taxes (EBIT) declined by 19% to $2.76 billion, although it still outperformed analysts’ forecasts of $2.47 billion.
Ford Pro and Hybrid Growth
Ford Pro, the company’s commercial vehicle division, delivered an impressive quarter with a 21% increase in volume and a 36% rise in revenue. Its operating profits more than doubled to $3 billion, significantly exceeding expectations. The growth was driven by higher production of the Super Duty Truck, software and services revenue, and operating leverage.
Ford’s hybrid strategy also showed promising results, with sales growing by 36% in the quarter. Hybrid vehicles are becoming an increasingly important part of Ford’s global mix.
Ford Model E and Cost Management
Ford Model E, the company’s electric vehicle division, reported lower sales due to industry-wide pressures. However, Ford remains disciplined with its EV strategy, aiming to match production and investment with demand. The automaker is focused on selling EVs that will be profitable in their first 12 months of production.
Ford also emphasized its commitment to cost reduction, expecting to achieve $2 billion in savings in areas like materials, freight, and manufacturing.
Full-Year Guidance
Ford raised its adjusted EBIT guidance for the full year to a range of $10 billion to $12 billion, with management expecting the business to track towards the higher end. The company also increased its adjusted free cash flow outlook to a range of $6.5 billion to $7.5 billion.
Analysts’ Outlook
Analysts remain positive about Ford’s long-term prospects due to its capital discipline, willingness to pivot towards hybrids and ICE vehicles, and the strength of Ford Pro. Despite concerns about quality issues and lower EV sales, Ford’s focus on profitability and cost control is seen as a favorable sign.
