Published - July 28th, 2023 @ 10:00 AM (GMT+2)
Ford Beats Q2 Expectations.
Lifts Full-year Guidance Amid EV Losses
Ford Motor Company (NYSE:F) witnessed an upswing in stock prices after strong Q2 earnings, raising its full-year profit forecast but anticipating larger annual losses in the EV division. The improvement comes on the back of rival GM's (GM) strong earnings and raised profit guidance.
Ford has significant Q2 Improvement and Full-Year Guidance Adjustment.
For the quarter, Ford reported a 12% improvement with a top-line revenue of $45.0 billion, beating the expected $40.17 billion, and adjusted EBIT of $3.8 billion. Adjusted earnings per share (EPS) stood at 0.72, surpassing the $0.54 consensus estimate. The full-year 2023 guidance for adjusted EBIT was raised from a previous range of $9 billion-$11 billion to a new estimate of $11 billion to $12 billion. Ford's adjusted free cash flow forecast also saw a rise to between $6.5 billion and $7 billion, up from a prior $6 billion projection.
Earnings Expectations for Business Segments in 2023
Ford Blue and Ford Pro's profit guidance saw an increase, with full-year loss projections for the Model e unit also increasing. EBIT expectations for 2023 stand at $8 billion for Ford Blue, $8 billion for Ford Pro, and a full-year loss of $4.5 billion for the Model e unit.
Slow EV Adoption and Q2 Sales Figures
EV adoption will be slower than initially expected, benefiting early adopters like Ford, according to CEO Jim Farley. Q2 sales increased by 9.9% from last year to 531,662 vehicles. Despite this, the company reported a 2.8% drop in EV sales for the quarter. Ford expects to reach a 600,000-unit EV production run rate during 2024, moving towards a 2 million annual run rate.
Analysts believe that the slowdown in EV adoption could benefit Ford due to its dominant position in North America. However, increased EV adoption is expected to pick up by 2024-2025, and Ford will need to adapt to maintain its position.
Ford's Q2 performance surpassed expectations, leading to a boost in full-year guidance. However, losses in the EV division pose a challenge. Despite a projected slowdown, the anticipated rise in EV adoption by 2024-2025 promises an interesting future for Ford.
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