Ford Motor Co. Beats Earnings Expectations in Q1: Ford Pro Shines, EV Revenue Falls

Key Takeaways:

• Ford reported adjusted earnings per share of 49 cents, beating analysts’ expectations of 42 cents.
• The Ford Pro segment saw a 36% increase in revenue to $18 billion, while EV revenues remained flat due to pricing pressures.
• Ford announced a dividend of 15 cents per share to be paid in June and improved forward guidance for free cash flow and capital expenditures.
• Shares in the automaker rose more than 3% in after-hours trading.

Ford Motor Co. shares surged over 3% in after-hours trading following strong sales of commercial vehicles that led to earnings exceeding expectations in the first quarter. The Michigan-based automaker reported adjusted earnings per share of 49 cents, surpassing Visible Alpha’s consensus estimate of 42 cents. Revenue for the quarter totaled $42.8 billion, aligning with estimates.

Commercial Unit Shines, Electric Vehicle Revenue Declines

CEO John Farley highlighted the success of Ford’s Ford Pro division, which focuses on commercial customers, noting growth in volumes, revenue, profitability, and services capabilities. Revenue in this segment soared by 36% driven by demand for work trucks, e-transits, and increasing adoption of electric vehicles in fleets.

While revenue from traditional combustion engine and hybrid vehicles dipped by 13% year-over-year, it remained profitable across all markets. The slowdown was primarily attributed to a gradual production ramp-up of the new 2024 F-150 pickup, which is now being delivered to customers.

On the other hand, Ford’s electric vehicle division experienced a significant decline in revenue by 84% compared to the previous year. The company acknowledged that EV costs are expected to improve, but intense pricing competition among EV manufacturers is impacting the top line.

Shares Rise Amid Steady Guidance and Dividend Announcement

CFO John Lawler stated that the full-year EBIT guidance remains unchanged, but the company anticipates adjusted free cash flow between $6.5 billion and $7.5 billion, up from the initial projection of $6 billion to $7 billion. Additionally, capital expenditures are now estimated to range from $8 billion to $9 billion, slightly lower than the previous forecast of $8 billion to $9.5 billion.

Furthermore, Ford declared a regular second-quarter dividend of 15 cents per share, scheduled to be paid on June 3. The announcement of the dividend and positive financial outlook contributed to a 3% increase in Ford’s stock price during after-hours trading. As of Wednesday’s close, the stock had appreciated by approximately 8% over the past year.

For more information, you can read the original article on Investopedia.

Overall, Ford’s strong performance in its commercial segment and strategic initiatives to enhance profitability and cash flow have positioned the company for continued growth and success in the automotive industry.