AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- Ford surpassed revenue expectations with $46.2 billion in Q3 revenue, exceeding the $41.9 billion forecast by analysts.
- The period saw lower net income of $900 million due to a $1 billion charge related to its electric vehicle (EV) business.
- Despite revenue beats, Ford revised its full-year adjusted EBIT outlook to approximately $10 billion, down from the previous range of $10 billion to $12 billion.
Ford Motor Company (NYSE:F) released its third-quarter earnings on Monday, surpassing revenue expectations but adjusting its full-year profit forecast to the lower end of its prior guidance. The automaker reported $46.2 billion in revenue, exceeding the $41.9 billion projected by analysts, according to Bloomberg. This figure, however, is slightly down from the $47.8 billion reported last quarter, but 5% higher than the $43.8 billion recorded in the same period last year.
Ford’s adjusted earnings per share (EPS) stood at $0.49, in line with analyst estimates. The company’s adjusted earnings before interest and taxes (EBIT) amounted to $2.6 billion, while net income came in at $900 million. This lower-than-expected net income was influenced by a previously disclosed one-time $1 billion charge related to Ford’s electric vehicle (EV) business.
Lowered Full-Year Profit Forecast
Despite beating revenue forecasts, Ford lowered its full-year profit outlook, now projecting 2024 adjusted EBIT to be approximately $10 billion, at the lower end of its previous forecast range of $10 billion to $12 billion. John Lawler, Ford’s Vice Chair and CFO, attributed this revision to "supplier disruptions" impacting Ford Pro, its commercial vehicle segment, and Ford Blue, the traditional gas-powered vehicle division.
Ford’s Q3 Performance by Business Unit
Ford’s earnings reflect the company's restructuring efforts under its Ford+ strategy, which divided the business into three core units: Ford Blue for gas-powered vehicles, Ford Model e for electric vehicles, and Ford Pro for commercial and super duty trucks.
For the third quarter, analysts had expected the following results:
- Ford Blue: $26.2 billion in revenue, $1.627 billion in EBIT.
- Ford Model e: $1.2 billion in revenue, with a loss of $1.224 billion in EBIT.
- Ford Pro: $15.7 billion in revenue, $1.814 billion in EBIT.
Ford confirmed that its Model e division continues to be a financial drain, with full-year losses for the EV unit expected to reach around $5 billion, slightly better than the previously projected $5.5 billion. Ford reiterated that true profitability for its EV business will only come with its next-generation EVs. An update on the company’s EV profitability outlook will be provided in the first half of 2025.
EV Sales and Market Dynamics
Ford’s U.S. vehicle deliveries rose by 4.3% year over year to 504,039 units in Q3, although this is a slight drop from the 536,050 vehicles delivered last quarter. The company saw a 12% year-over-year increase in electric vehicle sales, led by strong demand for the Ford F-150 Lightning pickup and the Ford E-Transit van. Hybrid vehicle sales also surged by 38%, with the Maverick pickup performing particularly well.
While Ford has made strides in EV growth, it still trails behind rival General Motors (GM), which has raised its full-year EBIT guidance for the third time this year. GM now expects adjusted EBIT between $14 billion and $15 billion, compared to its previous range of $13 billion to $15 billion.
Competitive Landscape: GM’s Advantage
Unlike Ford, GM has announced $16 billion in stock buybacks and share repurchases over the past year, giving it a competitive edge in capital returns. GM also projects it will achieve profitability for its EV business on a positive variable profit margin basis by the end of 2024, positioning it ahead of Ford, which sees EV profitability coming with the launch of its second-generation EVs.
Ford’s challenges in its EV division come amid an ongoing shift toward electric vehicles and increased competition in the sector. Investors are eagerly awaiting Ford’s more comprehensive update on its EV strategy and profitability, which is set to be delivered in the first half of next year.
