Ford Motor Company (NYSE: F) today posted Q3 2022 revenue of $39.4 billion and an $827 million net loss, a result of special items. The adjusted EBIT was $1.8 billion.
During Q3, Ford decided to shift its capital spending from the L4 advanced driver assistance systems being developed by Argo AI to internally developed L2+/L3 technology. The move was forced on Ford when Argo AI failed to attract new investors. Ford recorded a $2.7 billion non-cash, pretax impairment on its investment in Argo AI, resulting in an $827 million net loss for Q3. Adjusted earnings before interest and taxes were $1.8 billion, higher than the $1.4 billion to $1.7 billion the company estimated in September. Quarterly revenue was $39.4 billion, up 10% from a year ago. (AutoInformed.com on: Ford Motor Q3 Earnings to Take $1B Cost Hit; Ford Motor Posts Good Earnings But Weak Net Income)
The weak results were influenced by two things Ford warned about in mid-September:
- Supply shortages that left about 40,000 “vehicles on wheels” built, but awaiting needed parts – in inventory at the end of September. Ford claims it will complete the vehicles and sell them to dealers during Q4.
- ~$1 billion in higher-than-expected supplier payments.
Nonetheless, a fourth-quarter regular dividend of 15 cents per share was authorized today by Ford’s board of directors. The dividend is payable on Dec. 1 to shareholders of record at the close of business on Nov. 15. The company is also resuming a repurchase program “to offset the dilutive (sic) effect of stock-based compensation.”
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Ford North America achieved EBIT of $1.3 billion and a 5% EBIT margin, both down from a year ago because of higher commodity costs, inflationary pressure and unfavorable mix, with the un-shipped vehicles largely high-margin trucks and SUVs. The margin is expected to return to double digits in Q4.
Through the first nine months of the year, Ford was No. 2 in retail sales of EVs in the United States, a position it will have a tough time holding given the growing number of direct competitors, specifically GM, Toyota and perhaps Stellantis. General Motors yesterday posted Q3 earnings of $4.3 billion on global sales 966,000 vehicles. This came from record revenue and double-digit EBIT-adjusted margins. GM expects to double company revenue to $275 to 315 billion by 2030. (AutoInformed.com on: GM Earns $4.3 Billion in Q3 2022)
- Ford’s overall business in Europe was profitable in the third quarter as supply chain constraints began to ease and wholesale vehicle shipments were up 23% from Q2.
- Ford’s International Markets Group and South America units sustained their profitability following restructurings to de-risk the businesses and play to their strengths. IMG – which has launched the all-new Ranger at three of its four plants, with Silverton, South Africa, following soon – has gained more than a point of mid-size-pickup market share through the first nine months of the year.
- In China, Ford posted a loss in the quarter, attributable to investments in EVs. The Lincoln brand gained sequential share in the premium internal combustion engine segment.
- Ford Credit delivered a strong quarter, with earnings before taxes of~$600 million.
Ford Outlook
Ford now predicts full-year adjusted EBIT of ~$11.5 billion. That would be about 15% higher than in 2021. Such a performance implies ~10% year-over-year growth in wholesale shipments. Significantly higher earnings in North America and aggregate profitability in the rest of the world;and strong, but lower, EBT from Ford Credit.
Other assumptions include:
• No further deterioration in the supply chain.
• Continued strong pent-up demand and orders for Ford’s newest products.
• Persistent strength in pricing.
• Higher commodity and broad-based inflationary costs of about $9.0 billion.
• Strong, though lower, auction values at Ford Credit, along with higher borrowing costs.
• Continuation of a strong dollar.
Ford has raised its goal for full-year adjusted free cash flow to between $9.5 billion and $10 billion – up from $5.5 billion to $6.5 billion.
Ford Motor Posts Q3 Net Loss of $827 Million
Ford Motor Company (NYSE: F) today posted Q3 2022 revenue of $39.4 billion and an $827 million net loss, a result of special items. The adjusted EBIT was $1.8 billion.
During Q3, Ford decided to shift its capital spending from the L4 advanced driver assistance systems being developed by Argo AI to internally developed L2+/L3 technology. The move was forced on Ford when Argo AI failed to attract new investors. Ford recorded a $2.7 billion non-cash, pretax impairment on its investment in Argo AI, resulting in an $827 million net loss for Q3. Adjusted earnings before interest and taxes were $1.8 billion, higher than the $1.4 billion to $1.7 billion the company estimated in September. Quarterly revenue was $39.4 billion, up 10% from a year ago. (AutoInformed.com on: Ford Motor Q3 Earnings to Take $1B Cost Hit; Ford Motor Posts Good Earnings But Weak Net Income)
The weak results were influenced by two things Ford warned about in mid-September:
Nonetheless, a fourth-quarter regular dividend of 15 cents per share was authorized today by Ford’s board of directors. The dividend is payable on Dec. 1 to shareholders of record at the close of business on Nov. 15. The company is also resuming a repurchase program “to offset the dilutive (sic) effect of stock-based compensation.”
Click for more information.
Ford North America achieved EBIT of $1.3 billion and a 5% EBIT margin, both down from a year ago because of higher commodity costs, inflationary pressure and unfavorable mix, with the un-shipped vehicles largely high-margin trucks and SUVs. The margin is expected to return to double digits in Q4.
Through the first nine months of the year, Ford was No. 2 in retail sales of EVs in the United States, a position it will have a tough time holding given the growing number of direct competitors, specifically GM, Toyota and perhaps Stellantis. General Motors yesterday posted Q3 earnings of $4.3 billion on global sales 966,000 vehicles. This came from record revenue and double-digit EBIT-adjusted margins. GM expects to double company revenue to $275 to 315 billion by 2030. (AutoInformed.com on: GM Earns $4.3 Billion in Q3 2022)
Ford Outlook
Ford now predicts full-year adjusted EBIT of ~$11.5 billion. That would be about 15% higher than in 2021. Such a performance implies ~10% year-over-year growth in wholesale shipments. Significantly higher earnings in North America and aggregate profitability in the rest of the world;and strong, but lower, EBT from Ford Credit.
Other assumptions include:
• No further deterioration in the supply chain.
• Continued strong pent-up demand and orders for Ford’s newest products.
• Persistent strength in pricing.
• Higher commodity and broad-based inflationary costs of about $9.0 billion.
• Strong, though lower, auction values at Ford Credit, along with higher borrowing costs.
• Continuation of a strong dollar.
Ford has raised its goal for full-year adjusted free cash flow to between $9.5 billion and $10 billion – up from $5.5 billion to $6.5 billion.