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Detroit – Ford Motor On Tuesday, it reported first-quarter results that vastly beat Wall Street estimates, as the company’s fleet and legacy operations outpaced growing losses in electric vehicles.
Despite the big cadence, Ford has kept its previous ad 2023 directiveand the stock fell in extended trading.
Ford Chief Financial Officer John Lawler said the quarter was “a peek into what’s possible for value generation and growth.” His comments come months after CEO Jim Farley said the company failed to capitalize on $2 billion in extra profits last year due to “execution issues.”
here How did Ford During the quarter compared to what Wall Street expected based on average estimates compiled by Refinitiv:
- Earnings per share: 63 cents adjusted vs. 41 cents expected
- Car revenue: 39.09 billion dollars, compared to the expected 36.08 billion dollars
Farley said during the earnings call that the company had a “strong quarter while making real progress on the Ford+ growth plan.”
“I hope this becomes mainstream at Ford, boringly predictable when it comes to execution and presenting financials, but very ambitious in dynamically creating the Ford of the future,” Farley said.
The company reiterated that it expects full-year adjusted earnings of between $9 billion and $11 billion and about $6 billion in adjusted free cash flow. Ford said it plans $8 billion to $9 billion in capital expenditures in 2023.
Ford also reiterated that it expects to lose about $3 billion from its electric vehicle operations, known as Model e, in 2023. Ford said operating losses increased to $722 million in the first quarter from $380 million a year earlier as it ramped up production of electric vehicles. .
However, those losses were offset by the company’s traditional car business, known as Ford Blue, which earned $2.6 billion, and the automaker’s Ford Pro fleet operations, which posted $1.4 billion in profit. The automaker said that both business segments were profitable in every region in which it operated.
Lawler reiterated that the automaker expects the e-model to report a positive EBIT margin of 8% by the end of 2026, including first-generation electric vehicles by 2024.
Ford is reporting its quarterly financial results by business unit, rather than by region, for the first time. The Detroit automaker earlier this year released revised results for 2021 and 2022 under the new architecture.
Wall Street is keeping a close eye on the Model e EV unit as well as any comments on electric vehicle pricing following Tesla’s price changes. Ford said earlier Tuesday that it would again cut starting prices for its Mustang Mach-E electric car by thousands of dollars, while ramping up production and reopening order banks for the crossover.
“It’s a competitive sector, and we’re working to keep costs down,” Lawler told reporters after the company’s quarterly results. Ford expects to achieve an average of $5,000 in construction cost reductions. He said some models converting to lithium-iron phosphate batteries from lithium-ion should help with such reductions.
In the first quarter, Ford reported net income of $1.8 billion, or 44 cents per share, compared to a net loss of $3.1 billion, or 78 cents per share, during the year-ago period. Last year’s results were dented by a one-time fee related to its investment in an EV startup Rivian.
The company said total revenue, which includes Ford’s credit impact, grew 20% year-over-year to $41.5 billion.
There was additional pressure on Ford’s first quarter results after the crosstown rival general motors Last week it raised headline guidance for 2023 and reported results that beat Wall Street expectations for both revenue and earnings.
GM raised its adjusted earnings forecast to a range of $11 billion to $13 billion, or $6.35 to $7.35 a share, and its adjusted free cash flow forecast for cars to between $5.5 billion and $7.5 billion.
Despite GM’s results and guidance, its shares fell significantly last week as Wall Street analysts remained skeptical about the company’s ability to perform amid broader economic challenges and an auto industry normalizing away from expensive cars and record profits.
Ford’s attorney said “there will definitely be some pricing pressure” regarding the automaker’s legacy operations, as supply and demand normalize. He said the automaker’s pricing was flat during the first quarter.
CNBC channel Michael Blum Contribute to this report.
Correction: Analysts polled by Refinitiv expected Ford to report first-quarter automotive revenue of $36.08 billion. An earlier version miscalculated.
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