Ford Follows GM: Q2 2021 Earnings to Exceed Its Expectations

AutoInformed.com on Jim Farley, Ford president

Jim Farley during the reveal of the all-new 2020 Ford Explorer, Jan 2019.

In an attempt to protect its stock from the capital markets, CEO Jim Farley will tell Deutsche Bank auto conference today that Ford anticipates adjusted EBIT to be significantly better than in second-quarter of 2020. However, net income for Q2 of 2021 is expected to be substantially lower than a year ago, when results included a $3.5 billion gain on Ford’s investment in Argo AI. Ford plans to announce second-quarter results and provide its outlook for the second half of the year on July 28.

This “follow the leader” move is the result of unfortunate timing and lingering suspicions that the future of the automotive business with automated vehicles, fuel cells and other connected car technologies will consume enormous amounts of capital that will hurt shareholders, which in the case of Ford contains numerous family members. Yesterday, GM said it will increase its EV and AV investments from 2020 through 2025 to $35 billion. This is a, gulp, 75% increase from its initial pledge announced prior to the ongoing pandemic.

In order to appease or stimulate the capital markets, GM also noted that strong underlying business operations, including record EBIT-adjusted during the last three quarters translates to increases first-half 2021 guidance. GM now predicts its first-half EBIT-adjusted will be between $8.5 and $9.5 billion (from $5.5 B) because of continued strong demand, better-than-expected results at GM Financial, and improved near-term production from the pull forward of semiconductors from the third quarter. (AutoInformedGM Ups Bet by $35B in Autonomous, Electric Vehicle GamesGM Posts Formidable First-Quarter 2021 Results; GM to Up Deliveries by Dropping Stop-Start on Pickups, SUVs)

Farley will tell attendees at an auto conference that Ford is seeing improvement in its automotive business since providing full-year operating guidance on April 28, despite continuing uncertainty about supplies of semiconductors.  The improvement in automotive is being driven by lower-than-anticipated costs and favorable market factors.  Higher used vehicle auction values are benefiting Ford Credit.

“We’re providing customers with great value today and there’s much more on the way, because we’re executing Ford+ from strength – with iconic nameplates and leading positions with retail and commercial customers around the world, and the best financing company in our industry in Ford Credit,” said Farley.

The appeal of Ford and its influential products is evident in customer-reservation numbers for new, strategically important vehicles. Farley will report that reservations have increased to 190,000 for the full-size Bronco SUV, which is now in production – 125,000 of which have already been converted to orders; 100,000 for the battery-electric F-150 Lightning pickup; 36,000 for the all-new Maverick compact pickup, just a week after it was introduced to the world; and 20,000 for the all-electric E-Transit commercial van. Information is also available at shareholder.ford.com 

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One Response to Ford Follows GM: Q2 2021 Earnings to Exceed Its Expectations

  1. With the entire auto industry supporting more than 10 million jobs and contributing five percent to the nation’s GDP, now more than ever, the economy’s health and rebound will depend on the strength of this sector. Auto Innovators is committed to bringing you the latest data on sales, production, financing, forecasts, and metrics related to the health of the industry.

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