Ford Motor maintained its 2023 outlook late Tuesday after crushing first-quarter earnings estimates. F stock rose in Wednesday morning trade.
Legacy gas-powered vehicles, led by F-150 trucks, underpinned Ford's Q1 profits. Meanwhile, the automaker lost $722 million on its ambitious shift to electric vehicles, the Ford earnings release showed.
The unchanged 2023 outlook — despite the strong Q1 beat — implies some pressure in the second half of the year from macro uncertainty and easing of pricing power, analysts at Bank of America wrote in a note to clients Wednesday morning.
Ford Earnings
Estimates: Analysts polled by FactSet expected Ford earnings to rebound nearly 10%, year over year, to 42 cents per share. Revenue was seen bouncing 14% to $39.25 billion, including automotive revenue of $36.134 billion.
In the year-ago quarter, Ford earnings plunged 46%, hurt by lower delivery volumes due to the chip shortage and other supply disruptions.
Results: Ford earnings leapt nearly 66% to 63 cents a share. Revenue grew 20% to $41.5 billion.
The automaker generated $693 million in adjusted free cash flow during the quarter. Vehicle shipments rose 9% to nearly 1.1 million, according to the Ford earnings release.
Quarterly results benefited from "a favorable mix of products, higher net pricing and increased volume," the release said.
Ford also announced a capital markets event on May 21-22.
Outlook: Ford maintained its full-year 2023 guidance, first issued in early February. That includes guidance for adjusted EBIT of $9 billion-$11 billion and adjusted free cash flow of about $6 billion.
For full-year 2023, analysts forecast adjusted EBIT of $9.59 billion, near the low end of the company's guidance.
On a per-share basis, the Street expects Ford earnings of $1.62 for the full year, an almost 14% drop from 2022.
F Stock Action, Price Cuts
Shares of Ford Motor gained 1.2% to 11.94 on the stock market today, just under the 50-day moving average. They fell 2.2% to 11.80 Tuesday ahead of earnings. F stock remains well below the 200-day average.
Traditional automakers, including Ford and General Motors, continue to shift away from internal combustion-engine (ICE) cars to electric vehicles, or EVs, popularized by Tesla.
On Tuesday morning, Ford announced it will cut prices again on its Mustang Mach-E SUV, while reopening orders and ramping production for the Model Y rival. Hours earlier, Tesla slightly hiked Model Y and Model 3 prices in the U.S. and several other countries, after a series of recent price cuts raised margin concerns.
The lower Mach-E pricing follows a move to lower-cost, iron-based batteries, according to a Ford news release. It also reflects fierce competition in the fast-growing global market for electric vehicles.
GM stock shed 1.2% Tuesday after falling last week despite strong earnings and guidance. TSLA stock gave up nearly 1%.
Ford Earnings Report: A New Model — For Its Business
The Ford earnings report Tuesday broke down financial results by new business entities for the first time. In a significant break from the past, Ford will no longer report results by regional markets, the company announced in March.
Those new entities include Ford Blue, holding the legacy internal combustion engine (ICE) and hybrid vehicle business; and Ford Pro, targeting commercial and government customers. It also includes Ford Model e, containing the automaker's emerging and loss-making electric vehicle (EV) and software businesses.
During Q1, Ford's losses making electric vehicles swelled by about $300 million vs. a year earlier to $722 million. Quarterly shipments were held back by production halts for two popular EVs: the Mustang Mach-E and the F-150 Lightning pickup truck, Ford said.
But Ford Blue doubled profits to $2.6 billion during the quarter, while Ford Pro nearly tripled profits to $1.4 billion, the release said.
Tailwinds to sales and Ford earnings include supply-chain improvements, higher industry volumes, and lower material costs, the company said Tuesday, reiterating comments made in February.
Headwinds include global economic uncertainty, foreign exchange rates, and lower profit from its car financing arm.
Other EV Stocks
Meanwhile, Lordstown Motors, an EV startup, warned in a filing Monday that it may go bankrupt if a funding deal with Taiwanese contract manufacturer Foxconn doesn't come through. RIDE stock closed down 23% to 40 cents Monday but rallied 16.3% Tuesday.
Foxconn appeared to back away from the investment deal after Lordstown received a Nasdaq delisting notice, with its shares trading under $1 for 30 consecutive days.
Lordstown's startup peers Rivian, Lucid and Fisker were mixed Tuesday. All three report next week.
