Ford CEO Jim Farley at the company’s Dearborn, Michigan, plant where the electric F-150 Lightning will be built on April 26, 2022.
CNBC | Michael Wayland
Ford Motor Company said its adjusted operating income more than tripled from a year ago to $3.7 billion as it was able to offer customers more of its hottest new products.
Ford also reiterated its previous guidance for the full year and said it would increase its quarterly dividend to 15 cents per share, the amount paid before the Covid-19 pandemic.
Shares rose more than 6% in extended trading after the news was released.
Here are the key numbers:
- Adjusted earnings per share: 68 cents, compared to 12 cents in the second quarter of 2021. Wall Street analysts polled by Refinitiv had expected 45 cents.
- Revenues of the automotive industry: $37.91 billion, compared to $24.13 billion in Q2 2021. Analysts on average were expecting $34.32 billion, according to Refinitiv.
- Net Income: 667 million dollars compared to $561 million in the second quarter of 2021.
Ford said its adjusted earnings before interest and taxes, or adjusted EBIT, rose to $3.7 billion from $1.1 billion a year ago, as its margin rose to 9.3% from 3.9% on supply chain improvements and higher profitability of products sold. because of the combination. But despite those gains, Ford’s net profit was just $667 million after its stake in the electric vehicle startup lost $2.4 billion in value. Rivian Automotive.
Ford’s U.S. sales rose 1.8% year-over-year in the second quarter, driven by an 8% year-over-year increase in sales of Ford-branded SUVs and crossovers. Despite ongoing supply chain challenges, the automaker was able to build more of its popular models for its U.S. dealers than a year ago. That was good news for the company’s profit margins, as growing sales of these SUVs largely replaced sales of Ford’s now-discontinued and less profitable car models.
But inflation — specifically higher prices for key commodities and transportation — somewhat offset those gains, the company said.
CFO John Lawler said that despite inflation headwinds, Ford would stick to its previous guidance for the full year. It still expects full-year adjusted EBIT of $11.5 billion to $12.5 billion, up 15 percent to 25 percent year-over-year, and free cash flow of $5.5 billion to $6.5 billion.
Ford is in the midst of a major restructuring, devoting more resources to electric vehicles and cutting $3 billion in annual costs from its internal-combustion development business. Starting next year, the company will report results for three business units: Ford Blue, representing its internal combustion heritage; Ford Model e, its electric vehicle business; and Ford Pro, its utility vehicle management.
Lawler reiterated that Ford is aiming for a 10% adjusted EBIT margin for the company by 2026 and an 8% EBIT margin from its EVs. He acknowledged that it is not currently competitive with competitors. working to change. But he declined to comment on a Wall Street Journal report that Ford plans to cut thousands of jobs as part of its restructuring plan.
Ford said its deliveries in Europe rose by around 22% year-on-year to around 222,000 vehicles due to supply chain improvements and strong demand for commercial vehicles. But Ford’s wholesale shipments in China fell 24% to about 114,000 vehicles in the second quarter amid government-mandated shutdowns near Shanghai and elsewhere in eastern China.
Ford announced last week that it has secured 600,000 batteries per year by the end of 2023 to supply 100% electric vehicles, and plans to build 2 million per year by 2026.