Detroit: Ford Motor Co. posted strong first-quarter revenue and earnings on Tuesday thanks to strong demand for its trucks and SUVs, but measures were tempered by continued losses in its electric vehicle division. announced its full-year outlook.
Ford posted a first-quarter profit of $1.8 billion (RM8 billion), or 44 cents per share, compared with a loss of $3.1 billion, or 78 cents per share, a year ago. Adjusted diluted earnings per share were 63 cents, compared to 38 cents a year ago. Analysts had expected 41 cents.
The Dearborn, Michigan-based company reported sales of $41.5 billion for the quarter through March.
Ford Chief Executive Jim Farley said at a news conference that he wants the company to be “boringly predictable” to meet investor expectations. Ford missed Wall Street estimates for the fourth quarter, leaving $2 billion on the table, he said earlier this year.
Farley also said Ford would not pursue EV sales “at any cost.”
His stance contrasts with that of Tesla Inc. CEO Elon Musk. He said last month that EV makers could cut profit margins on car sales to zero and make up the difference by selling software-enabled services. However, Tesla has the advantage of earning higher profit margins on EVs than Ford and other legacy automakers have across their portfolios.
Farley said Ford, which is facing declining demand for its products in China, will restructure its operations in China to operate with less investment and “double its commercial vehicle business, including EVs.” “It’s planned.” A joint venture between Ford and Chinese automaker JMC Corp could become an export hub for low-cost commercial electric vehicles and internal combustion engines, he added.
Ford reported EBIT of $3.4 billion versus consensus of $2.4 billion, handily beating analyst expectations for first-quarter interest and pre-tax earnings.
The automaker reaffirmed its guidance for adjusted EBIT of $9 billion to $11 billion for the full year. These figures include his projected US$3 billion loss in Ford’s Model e electric vehicle division.
The stock fell 2% in after-hours trading.
U.S. car sales were much better than expected in April, but Ford warned that “increasing customer incentives across the industry due to rebalancing of supply and demand for vehicles” would be a “headwind” to profitability.
For the first time, the company announced financial results for the Ford Blue, Ford Pro and Ford Model e Unit. Ford Blue’s pre-interest and pre-tax earnings doubled to $2.56 billion, a margin of 10.4%, and Ford Pro EBIT almost tripled to $1.4 billion, a margin of 10.3%.
Ford’s overall EBIT margin was 8.1% after accounting for losses from the Model e.
Ford Blue expects full-year EBIT to rise slightly to $7 billion in 2023, while Ford Pro’s EBIT is expected to nearly double to $6 billion.
Ford lost more than US$60,000 per electric car sold in the first quarter. Based on the company’s financial data, the company’s combustion vehicle business, Ford Blue, averaged US$3,715 per vehicle before tax, while Ford Pro’s commercial business averaged US$4,053 per vehicle.
In a briefing, Chief Financial Officer John Lawler said the company is on track to have positive EBIT margins for electric vehicle Model e by the end of 2024. Farley’s goals were described as “perfectly realistic” given the company’s “aggressive” moves to reduce the cost of its next-generation EVs.
Demand for Ford’s F-150 Lightning electric pickup is “very strong,” Farley said. Ford is sticking to its plan to increase Lightning production to 150,000 units a year by the end of this year.
In the meantime, the company expects pricing pressure on the Ford Blue combustion models to continue, while the Ford Pro commercial vehicle maintains pricing strength. – Reuters
