Ford (F) shares rose more than 2% in morning trading after the legacy automaker released fourth-quarter results after the bell.
Pras Subramanian of Yahoo Finance says:
The company reported that fourth-quarter sales easily exceeded expectations, and its full-year profit outlook also exceeded expectations, but the company expects losses in its EV division to widen further.
The results come after General Motors (GM) announced strong financial results and profit guidance last week that showed the overall strength of the U.S. auto sector.
Ford reported top revenue of $46 billion compared to Bloomberg’s estimate of $40.35 billion. This is an increase of $2 billion from a year ago, despite the lingering effects of the United Auto Workers (UAW) strike early in the fourth quarter.
On the profitability front, Ford reported adjusted earnings per share of $0.29, compared to expectations of $0.13, and adjusted EBIT (earnings before interest and taxes) of $1.1 billion, compared to estimates of $988.2 million.
Ford’s adjusted EBIT for the current year was $10.3 billion, at the high end of its full-year 2023 adjusted EBIT forecast of $10 billion to $10.5 billion (including $1.7 billion in strike-related lost profits). Ford has restored its profit outlook for 2023 following the ratification of a collective bargaining agreement with the UAW.
For the full year 2024, Ford expects adjusted EBIT to be in the range of $10 billion to $12 billion, lower than Ford’s pre-UAW strike forecast for 2023 earnings of $11 billion to $12 billion. , exceeding expectations of $9.24 billion. Ford rival GM announced a 2024 profit outlook that is in line with its original 2023 outlook before the UAW strike.
“This guidance assumes flat to slightly increased U.S. vehicle production for the full year and generally low vehicle prices,” the company said in a statement.
Ford also announced a first-quarter common dividend of $0.15 per share and an additional dividend of $0.18 per share.
Ford Chief Financial Officer John Lawler said in a statement that Ford will improve capital efficiency by selectively reducing investments and “raising the bar” for expected returns on new initiatives.
“The goal is to improve adjusted gross return on invested capital from approximately 14% in 2023 to 20% over the next few years,” Lawlor said. “Just being ‘good’ is not enough. Investments are made in projects that have a reliable plan to achieve the desired benefits.”
