Ford (F) announced its third-quarter results after the bell on Monday, and although sales exceeded, full-year forecasts remained at the lower end.
The automaker’s results followed rival General Motors Co.’s big third-quarter report and boost to its profit outlook for the third time this year.
Ford reported sales of $46.2 billion, compared to an estimate of $41.9 billion according to Bloomberg data. Although this was lower than the $47.8 billion reported in the previous quarter, it was 5% higher than the year-ago quarter’s sales of $43.8 billion.
Adjusted earnings per share were $0.49, in line with expectations, and adjusted EBIT (earnings before interest and taxes) was $2.6 billion. Net income was $0.9 billion, impacted by previously disclosed EV-related one-time charges of $1.0 billion.
Ford has lowered its full-year profit forecast. The company now expects 2024 adjusted EBIT to be “approximately $10 billion,” which is at the lower end of its previous range of $10 billion to $12 billion.
Ford shares closed down nearly 9% on Tuesday.
In a press conference, Ford Vice Chairman and Chief Financial Officer John Lawler cited “supplier disruption” as the reason for the decline in sales at the Ford Pro and Ford Blue businesses. Lawlor elaborated that some of the disruption was due to hurricanes in the southern United States.
“Costs, especially warranties, have constrained our profitability, but by bending that curve we could create significant financial gains for investors,” Ford CEO Jim Farley said on a conference call with analysts. It’s going to pick up,” he added.
As part of the Ford+ plan, Ford has divided its operations into three divisions. Ford Blue is the traditional gasoline vehicle business, Ford Model e is the electric vehicle division, and Ford Pro is the commercial and super heavy truck business. Here’s what Ford reported for these business units in the third quarter:
Ford Blue: Sales of $26.2 billion, EBIT of $1.627 billion
Model e: $1.2 billion in revenue, -$1.224 billion in EBIT
Ford Pro: $15.7 billion in sales, $1.814 billion in EBIT
Ford said it now expects a full-year loss for the Model E to be about $5 billion, slightly lower than previously expected of $5.5 billion. Farley believes improvements will come from where and how the company produces its batteries.
“Specifically on cost, we expect to see significant progress in production tax credits for first-generation products next year and the year after that, which is really one of the key levers for us. “We’ve significantly reduced the cost of existing products by reconfiguring battery sourcing, battery sources, and battery manufacturers to maximize PTC,” Farley said on a conference call with analysts. This will lead to reductions.”
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Ford announced earlier this month that its third-quarter U.S. vehicle deliveries rose 4.3% from a year earlier to 504,039 vehicles, but were still down from the previous quarter’s deliveries of 536,050 vehicles. According to Ford, EV sales increased 12% year over year, thanks to the Ford Lightning pickup and Ford E-Transit van. Sales of Ford’s hybrid vehicles rose 38% year-on-year, led by the Maverick pickup truck.
A row of unsold 2024 Mustang Mach-E electric utility vehicles line up at a Ford dealership in Denver on May 19, 2024. (AP Photo/David Zalubowski, File) · ASSOCIATED PRESS
Meanwhile, GM has raised its guidance every quarter this year, with indicators such as adjusted EBIT of $14 billion to $15 billion (previously $13 billion to $15 billion).
GM also announced $16 billion in share buybacks and buybacks in the past year, while Ford has so far not announced any.
Conversely, GM expects EV profitability to be achieved on a positive variable margin basis by the end of this year, while Ford only expects to achieve real profitability with the arrival of second-generation EVs. said. Ford is expected to provide a full update on the outlook and profitability of its EV business in the first half of next year.
Pras Subramanian is a reporter for Yahoo Finance. you can follow him × And also on Instagram.
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