The Ford exhibition on the New York International Auto Show on March 28, 2024.
Danielle DeVries | CNBC
DETROIT – Selling Ford engine The automaker beat Wall Street’s first-quarter profit estimates on trucks and other business vehicles, offsetting losses on its electric vehicles.
The Company maintained its 2024 profit forecast calls for adjusted earnings before interest and taxes, or EBIT, between $10 billion and $12 billion. Capital expenditure expectations were lowered barely and adjusted free money flow guidance for the yr was raised.
The automaker now expects to generate adjusted free money flow of $6.5 billion to $7.5 billion, up from previous guidance of $6 billion to $7 billion. The forecast for capital spending is now $8 billion to $9 billion, below the unique estimated range of $8 billion to $9.5 billion.
Ford Chief Financial Officer John Lawler called the quarter “solid” on Wednesday, with the corporate on the high end of its previously announced guidance.
While the automaker beat earnings estimates, it missed barely on automotive sales. Here are the outcomes for Ford First quarterin comparison with Wall Street expectations, in line with LSEG:
- Earnings per share: 49 cents adjusted versus 42 cents expected
- Automobile sales: $39.89 billion versus expected $40.10 billion
Ford’s total revenue, including its lending business, rose about 3% year-over-year to $42.78 billion in the primary quarter.
Net income for the period was $1.33 billion, or 33 cents per share, compared with $1.76 billion, or 44 cents, a yr earlier. Adjusted EBIT fell 18% yr over yr to $2.76 billion, or 49 cents per share.
Ford’s traditional business, referred to as Ford Blue, reported adjusted profit that fell 66% to $905 million from a yr earlier. The business Ford Pro business generated $3.01 billion, up 120% from the primary quarter of last yr. Ford’s Model E electric vehicle division posted a lack of $1.32 billion from January to March.
2024 Ford vs. GM Stock
The significant decline in Ford Blue was related to the introduction of the corporate’s redesigned F-150 pickup, deliveries of which were held up for a lot of the quarter to deal with undisclosed quality issues.
Jim Farley, Ford’s CEO, said the corporate avoided “approximately 12 recalls” due to the extra quality testing through the delivery stoppage, reducing warranty costs for the corporate.
“In the long term, we will see fewer recalls and lower warranty costs as a result of this new process,” Farley said Wednesday during its first-quarter earnings call. “I’m really proud of the progress and quality of the team and we still have so much to do.”
Ford has faced years of excessive warranty costs, including $1.9 billion in 2023, which have hit its earnings. The company said last yr that it was at a $7 billion to $8 billion annual drawback in comparison with traditional competitors on account of production costs, quality issues and other operational inefficiencies.
Ford previously said it assembled 144,000 of the F-150 full-size and Ranger midsize pickups in the primary quarter of the yr. Deliveries of those vehicles to dealers and customers began earlier this month. About 92% of them built the pickups were F-150s.
As a part of its 2024 forecast, first released in February, Ford said the electrical vehicle company expected a lack of between $5 billion and $5.5 billion this yr. Ford Blue’s 2024 profit was expected to be around $7 billion to $7.5 billion, while Ford Pro’s full-year profit was expected to be around $8 billion to $9 billion.
Lawler said Ford stays on course to eliminate $2 billion in costs from the business this yr through savings on materials, freight and manufacturing. He said much of those savings will occur within the second half of the yr.
Ford’s first-quarter results come a day after its crosstown rival General Motors reported strong first-quarter results and raised its full-year guidance.
– CNBC’s Michael Bloom contributed to this report.
