Ford Motor (F) Q1 2023 results


DETROIT — Ford engine On Tuesday, first-quarter results comfortably beat Wall Street estimates as the automaker’s legacy fleet and operations offset mounting electric vehicle losses.

Despite the significant pace, Ford maintained its previously announced Orientation 2023and the stock fell in extended trading.

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Ford Chief Financial Officer John Lawler said the quarter was a “snapshot of what is possible to drive value and growth.” His comments come months after CEO Jim Farley said the company failed to capitalize on $2 billion in additional profits last year due to “execution issues”.

Here is how Ford did in 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
  • Automotive turnover: $39.09 billion vs $36.08 billion expected

Farley said on the earnings call that the company had “a strong quarter while making real progress on our Ford+ growth plan.”

“I hope this becomes a trend at Ford, boringly predictable in financial execution and delivery, but hugely ambitious in dynamically creating the Ford of the future,” Farley said.

The company reiterated that it expects annual adjusted earnings of between $9 billion and $11 billion and about $6 billion in adjusted free cash flow. Ford said it expects to have capital expenditures of between $8 billion and $9 billion in 2023.

Ford also reconfirmed that it expects to lose about $3 billion from its electric vehicle business, known as the Model e, in 2023. Ford said the loss from operations widened to $722 million in the first quarter, from $380 million a year earlier, as it ramps up production of electric vehicles. .

Those losses, however, were offset by the company’s traditional auto business, known as Ford Blue, which brought in $2.6 billion, and the automaker’s Ford Pro fleet operations, which brought in $1. $.4 billion in revenue. The automaker said both business segments were profitable in all regions where they operate.

Lawler reconfirmed that the automaker expects the Model e to post a positive EBIT margin of 8% by the end of 2026, including its 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 structure.

Wall Street is watching the Model e EV unit closely in addition to any comments on EV prices following Tesla’s price changes. Earlier on Tuesday, Ford said it would again cut starting prices for its electric Mustang Mach-E by several thousand dollars as it ramps up production and reopens order banks for the crossover.

“It’s a competitive segment, and we’re working on cost reductions,” Lawler told reporters after the company’s quarterly results. Ford expects an average of $5,000 in construction cost savings. He said some models switching to lithium-iron phosphate batteries from lithium-ion should contribute to such reductions..

For the first quarter, Ford reported net income of $1.8 billion, or 44 cents per share, compared with a net loss of $3.1 billion, or 78 cents per share, in the reporting period. ‘last year. Last year’s results were dragged down by a one-time charge related to its investment in the start-up of electric vehicles Rivian.

Total revenue, which includes the impact of Ford Credit, rose 20% year-over-year to $41.5 billion, the company said.

There was additional pressure on Ford’s first-quarter results after its Crosstown rival General Motors last week it raised its key forecast for 2023 and announced results that beat Wall Street forecasts for revenue and profit.

GM raised its adjusted earnings forecast to a range of $11 billion to $13 billion, or $6.35 to $7.35 per share, and its auto adjusted free cash flow forecast to between 5.5 and 7. .5 billion dollars.

Despite GM’s earnings and forecast, its shares notably fell last week as Wall Street analysts remained skeptical of the company’s ability to perform amid broader economic challenges and an auto industry. which is normalizing away from expensive vehicles and record profits.

Ford’s attorney said “there will certainly be some pricing pressure” regarding the automaker’s legacy operations as supply and demand normalize. The automaker’s prices were flat in the first quarter, he said.

—CNBC Michael Bloom contributed to this report.

Correction: Analysts polled by Refinitiv expected Ford to report auto revenue of $36.08 billion in the first quarter. An earlier version distorted the estimate.

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