Ford (P) Q3 2021 earnings

DETROIT — Ford Motor nearly doubled Wall Street’s earnings expectations and slightly beat revenue projections for the third quarter, prompting the automaker to increase its annual guidance for the second time this year.

Here’s Ford’s performance versus what Wall Street expected based on the average analyst forecast compiled by Refinitiv.

  • Customized EPS: 51 cents per share adjusted vs 27 cents per share expected
  • Automotive revenue: $33.21 billion vs. $32.54 billion expected

Ford shares jumped more than 9% during after-hours trading. The stock closed Wednesday down 2.7% to $15.51 a share.

Ford on Wednesday also said it would return its regular dividend from the fourth quarter, more than a year and a half after suspending payments during the early days of the coronavirus pandemic.

new guide

The automaker’s new full-year adjusted revenue guidance is between $10.5 billion and $11.5 billion, up from between $9 billion and $10 billion. Ford maintained its expectations for adjusted free cash flow of between $4 billion and $5 billion.

Incorporated into the new guidance are expectations for the fourth quarter which includes an increase in wholesale shipments from the third quarter, combined with a healthy mix of vehicles sold and net prices. Those gains are expected to run counter to successively lower yields from its financial arm, Ford said.

“The results show, really, the underlying strength of our business,” Ford CFO John Lawler told reporters Wednesday during a phone call.

The company increased its annual guidance although Lawler had previously said the second half of the year would be weaker than the first six months. He has cited $3 billion to $4 billion in profitable higher sales volume, but said commodity costs, lower revenue from Ford Credit and other factors such as $500 million in higher warranty costs dragged down his results over the year-end. .

‘More to come’

Ford cited strong demand for new products such as the Bronco SUV and Mustang Mach-E, which the company says could reach 200,000 units in global sales a year.

“I believe we have the right plans to drive growth and unlock unprecedented value,” Ford CEO Jim Farley told investors Wednesday during a phone call. “You’re already seeing a favorable shift in the slope of our earnings and cash flow. There’s a lot more to come.”

On an unadjusted basis, Ford’s net profit was $1.8 billion compared with $2.4 billion a year earlier, when most dealers and factories reopened after being closed for several second quarters due to the coronavirus pandemic. The automaker reported adjusted pre-tax revenue of $3 billion for the third quarter, down from $3.6 billion a year earlier.

Its auto revenue fell 5% during the quarter compared to $34.7 billion in the third quarter of 2020.

2022

Ford declined to provide financial guidance for 2022, but Lawler said the company expects the chip shortage to continue into next year and potentially, at a much lower rate, into 2023. He said Ford expects a 10% increase in wholesale vehicle volume in 2022 compared to this year. , as semiconductor shortages continue to impact business.

Lawler also said automakers expect commodity costs to rise $3 billion to $3.5 billion for 2021 and that they could raise another $1.5 billion in 2022.

Ford received several bullish calls from Wall Street analysts towards earnings, including an upgrade by Credit Suisse to outperform from neutral.

Ford’s biggest American rival, General Motors, reported third-quarter earnings early Wednesday that beat Wall Street forecasts. Despite the hit, GM shares fell more than 5% during intraday trading as the automaker lowered its free cash flow guidance for the year and fell short of some investors’ expectations for the rest of the year.

Separately, Farley on Wednesday said Ford would delay the rollout of the BlueCruise hands-free road driving system over-the-air from this year until the first quarter of next year. He said the delay was to simplify technology, which he saw as a new recurring revenue opportunity and a way for Ford to catch up with other systems from competitors like GM and Tesla.

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