Ford’s appearance at the New York International Auto Show on March 28, 2024.
Danielle DeVries | CNBC
DETROIT — Sales of Ford Motor trucks and other commercial vehicles led the automaker to beat Wall Street’s first-quarter profit estimates, offsetting losses in its electric vehicles.
The company is maintained 2024 earnings guidance for adjusted earnings before interest and taxes, or EBIT, between $10 billion and $12 billion. It slightly lowered expectations for capital spending and raised its adjusted free cash flow outlook for the year.
The automaker now expects to generate adjusted free cash flow of $6.5 billion to $7.5 billion – up from a previous outlook of $6 billion to $7 billion. Its forecast for capital spending is now $8 billion to $9 billion — down from the $8 billion to $9.5 billion range it had originally estimated.
Ford Chief Financial Officer John Lawler on Wednesday called the quarter “solid,” reiterating that the automaker is on track to meet its previously announced guidance.
While the automaker beat earnings estimates, it missed slightly on automotive revenue. Here are the results for Ford’s first quartercompared to Wall Street expectations, according to LSEG:
- Earnings per share: 49 cents adjusted vs. 42 cents expected
- Income from cars: $39.89 billion versus $40.10 billion expected
Ford’s total first-quarter revenue, including its credit business, rose about 3 percent year over year to $42.78 billion.
Net income for the period was $1.33 billion, or 33 cents a share, compared with $1.76 billion, or 44 cents, a year earlier. Adjusted EBIT fell 18% year over year to $2.76 billion, or 49 cents per share.
Ford’s traditional business, known as Ford Blue, reported adjusted earnings that fell 66 percent from a year earlier to $905 million. Its Ford Pro commercial business earned $3.01 billion, up 120% from last year’s first quarter. And Ford’s Model e electric vehicle unit posted a loss of $1.32 billion from January to March.
2024 Ford shares vs. GM
Ford Blue’s notable drop was related to the launch of the company’s refreshed F-150 pickup, which held shipments for most of the quarter to address unknown quality issues.
Ford CEO Jim Farley said the company avoided “about 12 recalls” thanks to additional quality checks during the stopover, helping to reduce warranty costs for the company.
“What we’re going to see in the long term is fewer recalls and lower warranty costs because of this new process,” Farley said Wednesday during the company’s first-quarter earnings call. “I’m really proud of the progress and the quality of the team and we still have a lot to do.”
Ford has faced years of inflated warranty costs, including $1.9 billion in 2023, that have hurt its profits. The company last year said it has a $7 billion to $8 billion annual disadvantage compared to its traditional rivals due to production costs, quality issues and other operational inefficiencies.
Ford previously said it assembled 144,000 of its F-150 and Ranger midsize pickups in the first quarter of the year. These vehicles began shipping to dealers and customers earlier this month. About 92% of the pickups are made it was an F-150 pickup.
As part of its 2024 guidance, first released in February, Ford said it expects its EV business to lose between $5 billion and $5.5 billion this year. Ford Blue’s earnings were expected to be roughly flat at $7 billion to $7.5 billion for 2024, while Ford Pro was expected to reach around $8 billion to $9 billion for the full year.
Ford’s first-quarter earnings come a day after its rival General Motors reported strong first-quarter results and raised guidance for the full year.
— The CNBC Michael Bloom contributed to this report.
This is a developing story. Check back for updates.