Ford shares (F) rose after hours after the automaker announced fourth-quarter sales that easily beat expectations and a better-than-expected full-year profit outlook, but the company said losses in its EV division We expect it to expand further. The results come after General Motors (GM) announced strong financial results and profit guidance last week that showed the overall strength of the U.S. auto sector.
Ford reported top revenue of $46 billion compared to Bloomberg's estimate of $40.35 billion. That's $2 billion more than a year ago, despite the lingering effects of the United Auto Workers (UAW) strike early in the fourth quarter. On the profitability front, Ford reported adjusted earnings per share of $0.29, compared to expectations of $0.13, and adjusted EBIT (earnings before interest and taxes) of $1.1 billion, compared to estimates of $988.2 million.
Ford's adjusted EBIT for the current year was $10.3 billion, at the high end of its full-year 2023 adjusted EBIT forecast of $10 billion to $10.5 billion (including $1.7 billion in strike-related lost profits). Ford has restored its profit outlook for 2023 following the ratification of a collective bargaining agreement with the UAW.
For the full year 2024, Ford expects adjusted EBIT to be between $10 billion and $12 billion, lower than its pre-UAW strike 2023 profit guidance of $11 billion to $12 billion, but below expectations. 9.24 billion dollars exceeded. Ford rival GM announced a 2024 profit outlook that is in line with its original 2023 outlook before the UAW strike.
“This guidance assumes flat to slightly increased U.S. vehicle production for the full year and generally low vehicle prices,” the company said in a statement.
Ford also announced a first-quarter common dividend of $0.15 per share and an additional dividend of $0.18 per share.
Ford Chief Financial Officer John Lawler said in a statement that Ford will improve capital efficiency by selectively reducing investments and “raising the bar” on expected returns from new initiatives. “The goal is to improve adjusted gross return on invested capital from approximately 14% in 2023 to 20% over the next few years,” Lawler said. “Just being ‘good’ is not enough. Investments are made in projects that have a credible plan to achieve the desired benefits.”
Last year, Ford split into three business units. Ford Blue is responsible for the traditional gasoline vehicle business, Ford Model E is responsible for the EV division, and Ford Pro is responsible for the commercial and super heavy truck business. Across these business lines, Ford reported:
ford blue
ford model e
ford pro
In the same year, Ford's Model e division posted an EBIT loss of $4.7 billion, reflecting a “highly competitive pricing environment and strategic investments in the development of clean-sheet, next-generation EVs.” The company said it is doing so.
Ford expects to post an EBIT loss of $5 billion to $5.5 billion for its Model E division in 2024, representing an even wider loss for the division compared to 2023.
“We think there's been a dramatic shift in the U.S. EV market over the past six months,” Ford CEO Jim Farley said on a conference call, as customers balk at high prices. . , to fund the development of next-generation EVs.
“We expect our next-generation, second-generation products to be profitable in the first 12 months of release,” Farley said, adding that the company will focus on manufacturing smaller EV products that are more profitable. Farley also revealed that Ford has had an in-house “Skunk Works” team working for the past two years on developing a low-cost EV platform to rival Tesla's soon-to-be-launched $25,000 EV. suggested the possibility that
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In early January, Ford hired 1,400 employees to replace the F-150 in an effort to adjust supply to what appears to be a slowdown in demand for EV pickups, which are under scrutiny but are experiencing rising prices. It has been separated from Lightning EV production and shifts have been reduced. “We continue to see growth, albeit at a slower pace. We are adapting to that growth,” Ford Model e spokesperson Martin Günsberg told Yahoo Finance.
As for Ford's Model E business, last quarter Ford said it would “push out” $12 billion in EV investments should production capacity be needed. Ford also delayed construction of a new battery factory in Michigan (which will use technology licensed from China's CATL) and scaled back battery production. The factory is scheduled to start operating in 2026.
Ford also saw EV sales decline in January, with EV sales down more than 10%, mainly due to a drop in sales of the Mustang Mach-E, which lost eligibility for the federal EV tax credit on January 1st. did. But overall car sales are up, with hybrid sales surging more than 40% for him. Ford said it is pushing to bring more hybrid vehicles to market to meet customer demand.
Ford's strong performance in January was a continuation of what the company was seeing in 2023. The company reported last month that total U.S. sales rose 7.1% to about 1,995,912 units, making 2023 the best year since 2020 for the Dearborn-based automaker. Ford said sales in its truck business were strong, with 1,081,777 trucks and vans sold in 2023, an increase of 13%. Growth across Ford nameplates was particularly strong for the Bronco Sport (up 28.1%), Edge (up 24.1%) and Lincoln Navigator (up 32.9%).
Sales of Ford's hybrid vehicles and EVs were also a highlight, with sales increasing by 25.3% and 17.9% in 2023, respectively.
Farley also said on the conference call that he believes 25% of all F-150 pickup sales could be hybrids in the near future, and that the company is currently producing hybrids “to the max.” Ta.
Correction: An earlier version of this article misstated Ford CFO John Lawlor's first name. We apologize for the error.
Pras Subramanian is a reporter for Yahoo Finance.you can follow him twitter And even more Instagram.
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