Ford earnings update ~ Stellar first quarter (as per CNBC) (03May2023)

From Twitter user ~ Sawyer Merritt

NEWS: Ford has reported Q1 earnings, and for the first time have broken out EV earnings.

• EPS : $0.63 adj. vs $0.41 expected

• Auto revenue: $39.09B vs $36.08B expected

Ford's EV unit lost $700 million in Q1, with EBIT margin being -102.1%.

Total combined free cash flow was $700 million.

From CNBC News extract:

The company reiterated it expects full-year adjusted earnings between $9 billion and $11 billion and roughly $6 billion in adjusted free cash flow. Ford said it plans to have capital expenditures of between $8 billion and $9 billion in 2023.

 

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

Those losses were washed out, however, 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 reported $1.4 billion in earnings. The automaker said both business segments were profitable in every region where they operate.

Ford expects $5,000 in build-cost reductions on average. He said some models switching to lithium-iron phosphate batteries from lithium-ion should assist in such reductions.

 

For 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-earlier period. Results last year were dragged down by a one-off charge related to its investment in EV startup Rivian. Total revenue, which includes the impact of Ford Credit, grew 20% year over year to $41.5 billion, the company said.

My investing muse

From the earnings, it is clear that Ford maintains a hold on the market. Though the EV division is losing money but Ford has turned in profits compared to the previous quarters. Ford admits that there are execution challenges that limited their profitability. Ford is planning to invest in their production as legacy automakers seek to keep their place and their fight. 

With the economic challenges coming, it remains to be seen who can benefit in the longer term but Ford is definitely not going away without a fight. All these will turn out to be good for the market and consumers.