In an attempt to shape expectations, Ford Motor late today again affirmed its expectation for full-year 2022 adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion. This is in the face of parts shortages, as well as higher payments made to suppliers to account for the effects of inflation.
However, the short term is grimmer. Based on recent negotiations, inflation-related Q3 supply costs will be ~$1.0 billion above plan. Ford predicts a Q3 adjusted EBIT of between $1.4 billion and $1.7 billion. In the slight of hand of automaker accounting practices, revenue is booked when a vehicle is shipped to a dealer, not sold to the end user.
While some of the problems are of Ford’s own creation, completing affected vehicles will shift some revenue and earnings to Q4. Now Ford says that 40,000 to 45,000 vehicles – comprised largely high-margin trucks and SUVs – will be completed and sold to dealers during Q4.
Ford quality problems and ongoing recalls remain an expensive and reputation damaging trends. During Q2 of 2022, it had revenue of $40.2 billion because of a 35% increase in wholesale shipments together with “favorable pricing and vehicle mix.” Operating cash flow was $2.9 billion and adjusted free cash flow was $3.6 billion, with automotive EBIT of $3.3 billion. Ford ended the quarter with $29 billion in cash, $45 billion in total liquidity.
However, Ford’s Q2 net income was $667 million, a margin of 1.7%, which included a mark-to-market loss of, gulp, $2.4 billion on Ford’s stake in Rivian. Ford is also in the process of slashing costs under its latest restructuring plan. General Motors Co. (NYSE: GM) reported Q2 net income attributable to stockholders of $1.7 billion and EBIT-adjusted of $2.3 billion. (AutoInformed: GM Q2 Earnings at $2.3B Off -$1.1B YoY) Ford Motor intends to announce full Q3 2022 financial results on Wednesday 26 October. It will provide more information about expectations for full-year performance at that time.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Ford Motor Q3 Earnings to Take $1B Cost Hit
In an attempt to shape expectations, Ford Motor late today again affirmed its expectation for full-year 2022 adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion. This is in the face of parts shortages, as well as higher payments made to suppliers to account for the effects of inflation.
However, the short term is grimmer. Based on recent negotiations, inflation-related Q3 supply costs will be ~$1.0 billion above plan. Ford predicts a Q3 adjusted EBIT of between $1.4 billion and $1.7 billion. In the slight of hand of automaker accounting practices, revenue is booked when a vehicle is shipped to a dealer, not sold to the end user.
While some of the problems are of Ford’s own creation, completing affected vehicles will shift some revenue and earnings to Q4. Now Ford says that 40,000 to 45,000 vehicles – comprised largely high-margin trucks and SUVs – will be completed and sold to dealers during Q4.
Ford quality problems and ongoing recalls remain an expensive and reputation damaging trends. During Q2 of 2022, it had revenue of $40.2 billion because of a 35% increase in wholesale shipments together with “favorable pricing and vehicle mix.” Operating cash flow was $2.9 billion and adjusted free cash flow was $3.6 billion, with automotive EBIT of $3.3 billion. Ford ended the quarter with $29 billion in cash, $45 billion in total liquidity.
However, Ford’s Q2 net income was $667 million, a margin of 1.7%, which included a mark-to-market loss of, gulp, $2.4 billion on Ford’s stake in Rivian. Ford is also in the process of slashing costs under its latest restructuring plan. General Motors Co. (NYSE: GM) reported Q2 net income attributable to stockholders of $1.7 billion and EBIT-adjusted of $2.3 billion. (AutoInformed: GM Q2 Earnings at $2.3B Off -$1.1B YoY) Ford Motor intends to announce full Q3 2022 financial results on Wednesday 26 October. It will provide more information about expectations for full-year performance at that time.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.