Ford CEO Jim Farley at the company’s factory in Dearborn, Michigan, where it is building the electric F-150 Lightning on April 26, 2022.
CNBC | Michael Wayland
Ford Motor Company said its adjusted operating income more than tripled from a year ago to $3.7 billion as it was able to offer more of its hottest new products to customers.
Ford also reiterated its previous full-year guidance and said it will raise its quarterly dividend to 15 cents a share, the amount it paid before the Covid-19 pandemic.
Shares rose more than 6% in extended trading after the news was released.
Here are the key numbers:
- Adjusted earnings per share: 68 cents, up from 12 cents in the second quarter of 2021. Wall Street analysts polled by Refinitiv had expected 45 cents.
- Income from automobiles: $37.91 billion, up from $24.13 billion in the second quarter of 2021. Analysts on average had expected $34.32 billion, according to Refinitiv.
- Net income: 667 million dollars versus $561 million in the second quarter of 2021.
Ford said its adjusted earnings before interest and taxes, or adjusted EBIT, jumped to $3.7 billion from $1.1 billion a year earlier, as its margin improved to 9.3% from 3.9% on chain improvements supply and a more profitable mix of products sold. But despite that gain, Ford’s net income was just $667 million as it accounted for a $2.4 billion decline in the value of its stake in electric vehicle startup Rivian Automotive.
Ford’s US sales rose 1.8% in the second quarter from a year ago, powered by an 8% year-over-year increase in sales of Ford-branded SUVs and crossovers. Despite ongoing supply chain challenges, the automaker was able to build more of its popular models for its U.S. dealers than a year ago. That was good news for the company’s profit margins, as those growing SUV sales largely replaced sales of Ford’s now discontinued and less profitable car models.
But, the company said, inflation — specifically, higher prices for key commodities and transportation — offset those gains to some extent.
Chief Financial Officer John Lawler said that despite inflation headwinds, Ford is sticking to its previous guidance for the full year. It still expects adjusted EBIT of $11.5 billion to $12.5 billion for the year, which would represent 15% to 25% growth from last year, with adjusted free cash flow between $5.5 billion and $6.5 billion.
Ford is in the midst of a major restructuring, devoting more resources to electric vehicles and cutting $3 billion in annual costs from its internal combustion development efforts. Starting next year, the company will report results for three business units: Ford Blue, representing its legacy internal combustion business; Ford Model e, its electric vehicle business; and Ford Pro, its commercial vehicle operation.
Lawler reiterated that Ford is aiming for a company-wide adjusted EBIT margin of 10% — and an 8% EBIT margin from its EVs — by 2026. He acknowledged that it is not “cost competitive” with rivals for moment, something the company is working to change. But he declined to comment on a Wall Street Journal report that Ford is planning to lay off thousands of workers as part of its restructuring plan.
Ford said its deliveries in Europe rose about 22% from the year-ago period to about 222,000 vehicles on supply chain improvements and strong demand for its commercial vehicles. But Ford’s bulk deliveries in China fell 24% in the second quarter, to about 114,000 vehicles, amid extended government-mandated shutdowns near Shanghai and other parts of eastern China.
Ford said last week it has secured 100% of the battery supplies it will need to deliver electric vehicles at a rate of 600,000 a year by the end of 2023 and is on track to build 2 million in year until 2026.
