Ford Motor Co. Impresses with Higher Profit and Revenue Increase
Ford Motor Co. saw its shares rise by nearly 3% in after-hours trading on Thursday following the release of its second-quarter earnings report. The automaker announced a profit that was nearly three times higher than the previous year, along with a 12% increase in quarterly revenue. As a result, Ford has raised its outlook for 2023.
In Q2, Ford earned $1.9 billion, or 47 cents per share, representing a significant increase from the year-ago period. The profit margin also expanded by 4%. After adjusting for one-time items, the automaker's earnings came in at 72 cents per share.
Ford's revenue for the quarter reached $45 billion, reflecting a 12% surge compared to the same period last year. Notably, the company experienced a substantial 39% rise in its EV (electric vehicle) business.
Positive Outlook for Ford's Future
Analysts surveyed by FactSet had projected adjusted earnings of 54 cents per share on sales of $43.17 billion for Ford. However, the actual results exceeded expectations, prompting the company to revise its guidance. Ford now expects its full-year EBIT (earnings before interest and taxes) to land between $11 billion and $12 billion. Moreover, the automaker has adjusted its projections for 2023 adjusted free cash flow to range between $6.5 billion and $7 billion, with capital expenditures estimated at $8 billion to $9 billion.
While Ford acknowledges certain "headwinds" such as global economic uncertainty and inflationary pressures, higher customer incentives industrywide, and ongoing challenges in EV pricing, it remains optimistic about several "tailwinds." These include an improved supply chain, increased industry volumes, the launch of the all-new Ford Super Duty truck, and lower commodity costs.
Ford's Impressive Performance Compared to Competitors
With the release of Ford's earnings report, the major U.S. automakers' financial cycle comes to a close. Tesla Inc. reported its second-quarter earnings last week, and General Motors Co. announced its results earlier this week. Ford's shares have seen a 19% increase since the beginning of the year, matching the performance of the S&P 500 index. However, the stock has outperformed the index over the past three months, with a 19% gain compared to the S&P's 11%.
