Ford reported third quarter earnings on Monday, beating revenue estimates but guiding to the lower end of its full-year profit forecast. The company posted revenue of $46.2 billion, a decrease from the $47.8 billion reported last quarter but 5% higher than a year ago. Ford matched adjusted earnings per share estimates of $0.49, with adjusted earnings before interest and taxes of $2.6 billion.
Net income came in at $900 million, impacted by a $1 billion one-time EV-related charge. Ford has lowered its 2024 adjusted EBIT forecast to about $10 billion, at the lower end of its previous $10 billion to $12 billion range. Shares fell over 6% in premarket trading on Tuesday following the report.
CFO John Lawler cited supplier disruptions, including hurricane impacts in the southern US, as reasons for lower sales in Ford Pro and Ford Blue divisions. CEO Jim Farley said, “We have made strategic decisions and taken tough actions to create advantages for Ford versus the competition in key areas like Ford Pro, international operations, software, and next-generation electric vehicles.”
Ford’s business is divided into three units: Ford Blue for traditional gas-powered vehicles, Ford Model e for electric vehicles, and Ford Pro for commercial and super duty trucks. In Q3, Ford Blue recorded $26.2 billion in revenue, Ford Model e $1.2 billion, and Ford Pro $15.7 billion.
The company expects full-year Model e losses to be about $5 billion, slightly lower than previously projected. Ford’s Q3 US deliveries rose 4.3% year over year to 504,039 vehicles, although down from last quarter. EV sales jumped 12%, fueled by the Ford Lightning pickup and E-transit van.
Hybrid vehicle sales, led by the Maverick pickup, surged 38%.
Ford’s full-year forecast adjusted
While rival GM has raised its guidance each quarter and announced buybacks, Ford has yet to take similar actions.
GM projects EV profitability by year-end, whereas Ford sees real EV profitability further down the line. Ford will provide a full update on its EV business outlook later. Several analysts had expressed concerns that Ford might need to lower its forecast due to softening demand, rising vehicle inventory, and doubts about achieving its $2 billion in cost cuts.
CFO Lawler confirmed the cost reductions but noted that higher inflationary and warranty costs have offset the savings. Ford reported lower-than-expected warranty costs for Q3, which had spiked by $800 million year-over-year in Q2. “It’s an improvement, but it’s not as big as we would like to see,” Lawler commented.
CEO Farley reiterated the company’s belief in its EV strategy but indicated a pullback on some investments. Ford’s net income for Q3 was $896 million, or 22 cents per share. Adjusted EBIT increased roughly 16% year-over-year to $2.55 billion.
Overall revenue, including Ford’s finance business, grew approximately 5% year-over-year to $46.2 billion, marking the company’s 10th consecutive quarter of year-over-year revenue growth. Farley highlighted Ford’s operations in China contributing over $600 million to EBIT and plans to increase vehicle exports from the country. He also addressed rising vehicle inventory levels, expressing optimism about the mix and price of these vehicles.
