Ford Mustang on display at the NY Auto Show, April 6, 2023.
Scott Mlyn | CNBC
DETROIT — Ford Motor, a renowned automotive company, pleasantly surprised Wall Street with its second-quarter earnings and raised its 2023 guidance. Despite the slower than expected adoption of electric vehicles (EVs), Ford’s traditional vehicles continue to generate strong pricing and demand.
Ford now projects its full-year adjusted earnings to be in the range of $11 billion to $12 billion, surpassing its previous forecast of $9 billion to $11 billion. Furthermore, the company expects its adjusted free cash flow to be between $6.5 billion and $7 billion, up from the previous guidance of $6 billion.
This upward revision in guidance comes after General Motors, Ford’s competitor, raised its yearly guidance for the second time this year. Ford’s finance chief, John Lawler, emphasized that the demand and pricing for traditional vehicles are performing better than anticipated. However, the adoption of electric vehicles is slower due to higher costs.
During the second quarter, Ford’s traditional business operations, known as Ford Blue, generated $2.31 billion, while its Ford Pro commercial business earned $2.39 billion. However, its “Model e” electric vehicle unit incurred a loss of $1.08 billion. Ford now expects its EV business to lose $4.5 billion this year, widening losses compared to roughly $3 billion in the previous year.
Here’s a comparison of Ford’s second quarter performance with Wall Street expectations:
- Adjusted earnings per share: 72 cents (expected: 55 cents)
- Automotive revenue: $42.43 billion (expected: $40.38 billion)
Ford reported a significant increase in net income, amounting to $1.92 billion or 47 cents per share, compared to $667 million or 16 cents per share in the previous year. The company’s adjusted earnings before interest and tax (EBIT) rose to $3.79 billion from $3.72 billion a year ago.
Although the adjusted margin dropped to 8.4% from 9.3% in the year-ago period due to increased production and sales, Ford’s total revenue for the quarter reached $45 billion, a 12% increase from the previous year.
This quarter marks Ford’s shift towards reporting financial results by business unit rather than by region.
— CNBC’s Michael Bloom contributed to this report.
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