Ford CEO Jim Farley poses for a photo before announcing at a news conference that Ford Motor Company will partner with the world's largest battery company, China-based Contemporary Amperex Technology, to create a plant of electric vehicle batteries in Marshall, Michigan, on February 1, 2019. December 13, 2023, in Romulus, Michigan.
Bill Pugliano | fake images
DETROIT— Ford engine beat Wall Street's revenue and results expectations for the fourth quarter and forecast better-than-expected results for 2024.
The company's full-year forecast calls for adjusted earnings before interest and taxes, or EBIT, of between $10 billion and $12 billion, adjusted free cash flow of $6 billion to $7 billion and capital spending of $8 billion. to 9.5 billion dollars.
Analysts expected Ford's adjusted earnings guidance to be roughly $9 billion to $11 billion, according to several analyst notes to investors.
The automaker also announced a special dividend of 18 cents per share, in addition to a regular first-quarter dividend of 15 cents per share. Dividends will be paid on March 1 to shareholders of record at the close of business on February 16.
Ford shares rose about 6% in after-hours trading, adding to a 4.1% gain during Tuesday trading to close at $12.07.
Here's how Ford fared during the fourth quarter compared to what Wall Street expected, according to average estimates compiled by LSEG, formerly known as Refinitiv:
- Profits: 29 cents per share adjusted vs. 14 cents per share adjusted, expected
- Automotive income: $43.2 billion vs. $40.12 billion expected
Ford CEO Jim Farley described last year as a “foundational year” for the automaker, specifically highlighting several cost improvements; high gross margin on its BlueCruise hands-free highway system; and hybrid vehicles, with which the company expects to increase its sales by 40% this year.
“It was a solid year, but I want to be very clear that we are nowhere near our earnings potential for Ford Motor Co.,” Farley told investors Tuesday. “We are really well positioned this year in terms of growth and profitability, as well as revenue.”
For the fourth quarter, Ford reported a net loss of $526 million, or 13 cents per share, compared with a profit of $1.29 billion, or 32 cents per share, during the same period a year earlier. Adjusting for one-time items, the company reported earnings per share of 29 cents.
Overall revenue during the period rose about 4% to $46 billion, up from $44 billion a year earlier. Adjusted earnings before interest and taxes (EBIT) decreased 59% to $1.05 billion from the same period a year earlier.
Adjusted earnings for Ford's traditional business, known as Ford Blue, declined about 48% during the fourth quarter compared with a year earlier to $813 million. Its Ford Pro commercial business earned $1.81 billion, up 25% from the previous year. Ford's Model e electric vehicle unit posted a loss of $1.57 billion from October to December, more than double a loss of $631 million during the fourth quarter of 2022.
Ford stock over the past year.
For full year 2023, Ford reported $10.42 billion in adjusted EBIT, in line with 2022; revenue of $176.2 billion, up 11% year-over-year; and adjusted free cash flow of $6.8 billion, down $2.3 billion from the prior year. Net income was $4.33 billion, compared to a loss of $2.15 billion in 2022.
The company's traditional and fleet businesses helped offset $4.7 billion in losses from its electric vehicle business.
In November, Ford lowered its full-year forecast in light of contract negotiations with the United Auto Workers union.
Ford Chief Financial Officer John Lawler said Tuesday that the company continues to look for ways to offset rising labor costs due to the new UAW contract, which the company said is expected to cost $8.8 billion over the life of the agreement, which ends in April 2028. Ford has already announced plans to delay or cut spending on several electric vehicle products.
“All of our EV teams are relentlessly focused on the cost and efficiency of our EV products because the ultimate competition will be affordability. tesla and the chinese [automakers]Farley said.
Ford is expected to face headwinds this year, including lower vehicle prices, warranty costs and continued losses for all-electric vehicles. The bright spots are expected to be its Ford Pro fleet unit and the traditional Ford Blue internal combustion engine business.
—CNBC Michael Bloom contributed to this report.
