Ford (F) stock is higher after hours after the automaker reported strong second quarter earnings and also upped its full-year profit forecast, though it did project steeper annual losses in its EV division. Ford’s results come after its crosstown rival GM (GM) reported strong earnings and raised its full-year profit guidance for a second time.
For the quarter, Ford reported top-line revenue of $45.0 vs $40.17 billion expected, a 12% improvement from the $37.91 billion it reported a year ago and sequentially higher than Q1’s $41.5 billion. Ford posted adjusted earnings per share (EPS) of 0.72, a big beat over the $0.54 consensus estimate, and adjusted EBIT of $3.8 billion.
In terms of full-year guidance, Ford raised its full-year 2023 guidance for adjusted EBIT to between $11 billion and $12 billion, where previously it saw $9 billion-$11 billion. Ford also lifted its adjusted free cash flow forecast to between $6.5 billion and $7 billion, from a prior $6 billion projection.
For its business level full-year projections, Ford boosted profit guidance for Ford Blue and Ford Pro, but increased its loss projection for Ford Model e. Segment level EBIT expectations for 2023 now stand at:
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$8 billion in EBIT for Ford Blue (from $7 billion)
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$8 billion in EBIT for Ford Pro (from $6 billion)
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a full-year loss of $4.5 billion for its Model e unit (from $3 billion)
Ford said the higher loss projection for Ford Model e reflected “the pricing environment, disciplined investments in new products and capacity, and other costs.”
Ford did up its EV production forecast, with the company now expecting to reach a 600,000-unit EV production run rate during 2024, on the way to achieving a 2 million annual run rate.
“The near-term pace of EV adoption will be a little slower than expected, which is going to benefit early movers like Ford,” Ford CEO Jim Farley said in a statement. “EV customers are brand loyal and we’re winning lots of them with our high-volume, first-generation products; we’re making smart investments in capabilities and capacity around the world; and, while others are trying to catch up, we have clean-sheet, next-generation products in advanced development that will blow people away.”
From a deliveries standpoint, earlier this month Ford reported Q2 sales rose 9.9% from a year ago to 531,662 vehicles. The Dearborn, Michigan-based automaker saw sales gains across most of its truck and SUV portfolio. In particular, Ford trucks, with its crown jewel F-150 pickup lineup, notched a 34% sales jump. Total Ford truck sales were up 26.2%, which Ford says makes it the top-selling truck maker in the US.
Somewhat worrying for Ford and investors was a dip in EV sales, with the company noting EV sales dropped 2.8% for the quarter, with Mustang Mach-E sales down 21.1% and its E-Transit electric van sales down 23.8%. However, Ford did say Mach-E sales “quickened” at the end of Q2.
Ford also drastically cut the prices of its F-150 Lightning EV pickup earlier this month, claiming falling raw material costs and “continued work on scaling production and cost” at its Rouge factory allowed for the price reductions. It’s possible the continued sales success of Rivian’s R1T pickup, rising inventories, and the impending release of Tesla’s Cybertruck played a part in the decision.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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