As the outlook for inflation is unpredictable and the Fed continues to raise interest rates, there are growing concerns that the U.S. economy is about to fall into recession, with the auto industry being hit the hardest.
So far this year, Ford is down 39%, compared to a 16% drop in the S&P 500 over the same period.
Ford convinced investors through its earnings performance that the company would not fall into the red and that everything would improve in the second half of the year, and maintained its full-year earnings forecast.
Ford Q2 Earnings Beat Estimates
Ford shares popped after the company beat earnings and revenue expectations, with a substantial jump in operating income.
Ford said adjusted EBIT, jumped to $3.7 billion from $1.1 billion a year ago, as its margin improved to 9.3% from 3.9% on supply chain improvements and a more profitable mix of products sold.
But despite that gain, Ford’s net income was just $667 million after it accounted for a $2.4 billion decline in the value of its stake in electric vehicle startup $Rivian Automotive, Inc.(RIVN)$.
Despite ongoing supply chain challenges, the automaker was able to build more of its popular models for its U.S. dealers than a year ago. That was good news for the company’s profit margins, as those incremental SUV sales largely replaced sales of Ford’s now-discontinued and less-profitable car models.
However, inflation — specifically, higher prices for key commodities and transportation — offset those gains to some extent.
Ford also reported $2.9 billion in operating cash flow and $3.6 billion in adjusted free cash flow, leading the board of directors today to issue a dividend of $0.15 a share for all outstanding stock.
Starting next year, Ford will operate and report financial results around:
Ford Blue - the traditional ICE (internal combustion engine) business
Ford Model e - the EV business along with software and connected services
Ford Pro – the commercial and government vehicles business unit.
Ford accelerates EV push
Although it is important to control costs, however, for important business, it is necessary to spend money.
Last week Ford reiterated that it was on track to build 600,000 EVs annually by 2023, as it detailed new partnerships with CATL and LG Energy for raw materials and battery production. Ford said it aims to increase its annual EV production capacity to 2 million vehicles by 2026, and that it has sourced 70% of the materials needed to reach that goal.
In accordance with the recently published financial statements, Ford Motor has a Beta of 1.1.
Beta is a way of measuring a stock's volatility compared with the overall market's volatility. The market as a whole has a beta of 1. Stocks with a value greater than 1 are more volatile than the market.
This is 30.95% higher than that of the Consumer Cyclical sector and 30.95% higher than that of the Auto Manufacturers industry.
SHARE YOUR THOUGHTS
Do you think Ford will be able to meet its expectations of producing 600,000 EVs annually by 2023?
Comments
For an established ICE car maker, cannot fanthomed how Ford Mgmtcould not learnt from others about investing in new EV startups?
There are so many live examples to learn from eg. Lord's Town Motors, Fisker, Hyliion etc.. Yet..
Having said that, think it is a step in the right now that Ford has turned to the World's favourite manufacturer - China's CATL and Korea's LG for batteries.
Apart from its plants in Ohio, Wayne, etc.. Ford will be adding another plant in Valencia, Spain to augment its EVs production (slated to commence production towards end 2023).
It is still too early to affirm whether Ford will be able meet its ambitious target of 600,000 EVs target in a mere 1.5 year's time line and under such volatile times with a warring backdrop - a sudden turn of event/s can derail any well mapped out plan.
//@JLSE: 👍👍👍// @koolgal: Ford has just delivered a very impressive Q2 earnings report and its share price has jumped 14% since then. Earnings skyrocketed 423% to 68 cents per share! Revenue leapt 50% to USD40.19 billion. That jump was due to a 35% increase in shipments together with favourable pricing and vehicle mix.Ford is also maintaining its outlook for the year with a full year 2022 EBIT of USD11.5 billion to USD 12.5 billion, up from 15% to 25% from previous year.Can Ford deliver 600,000 EVs? I believe Ford is doing everything it can. It is cutting 8000 jobs from its Internal Combustion Unit to fund its EV spending Ford also confirms that it had secured 100% of the battery cell capacity needed to support its annual target of 600,000 EVs.So Ford is certainly firing on all its engines to beat its competitors. Watch out Tesla! Ford is catching up soon! @MillionaireTiger @TigerStars @CaptainTiger
Ford has just delivered a very impressive Q2 earnings report and its share price has jumped 14% since then. Earnings skyrocketed 423% to 68 cents per share! Revenue leapt 50% to USD40.19 billion. That jump was due to a 35% increase in shipments together with favourable pricing and vehicle mix.
Ford is also maintaining its outlook for the year with a full year 2022 EBIT of USD11.5 billion to USD 12.5 billion, up from 15% to 25% from previous year.
Can Ford deliver 600,000 EVs? I believe Ford is doing everything it can. It is cutting 8000 jobs from its Internal Combustion Unit to fund its EV spending Ford also confirms that it had secured 100% of the battery cell capacity needed to support its annual target of 600,000 EVs.
So Ford is certainly firing on all its engines to beat its competitors. Watch out Tesla! Ford is catching up soon!
@MillionaireTiger @TigerStars @CaptainTiger
//@koolgal: Thanks for liking my post 😍😍😍//@JLSE: 👍👍👍// @koolgal: Ford has just delivered a very impressive Q2 earnings report and its share price has jumped 14% since then. Earnings skyrocketed 423% to 68 cents per share! Revenue leapt 50% to USD40.19 billion. That jump was due to a 35% increase in shipments together with favourable pricing and vehicle mix.Ford is also maintaining its outlook for the year with a full year 2022 EBIT of USD11.5 billion to USD 12.5 billion, up from 15% to 25% from previous year.Can Ford deliver 600,000 EVs? I believe Ford is doing everything it can. It is cutting 8000 jobs from its Internal Combustion Unit to fund its EV spending Ford also confirms that it had secured 100% of the battery cell capacity needed to support its annual target of 600,000 EVs.So Ford is certainly firing on all its engines to beat its competitors. Watch out Tesla! Ford is catching up soon! @MillionaireTiger @TigerStars @CaptainTiger