Less than a day after reaching a deal with the UAW on a new 4.5-year contract, Ford reported a $1.2 billion net profit on revenue of $43.8 billion. The results are significantly better than the year ago period, when the automaker reported a loss.
Ford CEO Jim Farley said the Ford+ plan was having the desire impact on the company’s bottom line.
Ford Motor Co. reported numbers in the black for the third quarter, unlike the same time last year when it was in the red.
The automaker reported revenue of $43.8 billion, up 11% from third-quarter 2022 as well as net income of $1.2 billion reversed a year-ago net loss of $827 million. The number would be higher, except the company took a $2.7 billion non-cash, pretax impairment on Ford’s investment in Argo AI. Adjusted earnings before interest and taxes, or EBIT, in Q3 increased to $2.2 billion.
The company’s in the midst of a complete makeover called Ford+ under the supervision of CEO Jim Farley. After a tough start, profit-wise, things are turning around.
Due to the UAW strike, Ford withdrew its full year earnings guidance.
“I’m very optimistic about the reality we’re creating with Ford+,” Farley said in a statement. “We’re building a more dynamic, highly talented and customer-focused company at the intersection of great vehicles, iconic brands, innovative software and high-value services.
“We’re also radically changing how we work with a series of actions that put the right people with the right capabilities in the right places across the organization, so that our promise isn’t masked by cost and quality issues.”
Impact of strike
The company declined to quantify the impact the 41-day strike had on its bottom line, but the estimates are in the hundreds of millions, if not billions. Anderson Consulting Group projected the strike already cost $9.3 billion overall. But the company did make an adjustment.
“Through the third quarter, Ford earned $9.4 billion in adjusted EBIT toward the full-year range of $11 billion to $12 billion it affirmed in late July. Based on that and strong demand for Ford’s products, (CFO John) Lawler said that the company had been poised to deliver profitability within that range,” the company noted.
However, given effects of the UAW strike and with ratification of the tentative agreement with the union that was announced Wednesday night pending, Ford withdrew its guidance for full-year 2023 operating results. GM did the same on Tuesday.
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