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Ford Tops Wall Street’s Q1 Earnings Estimates

by | April 24, 2024

Ford offered up good news with its first quarter earnings report, beating analysts’ estimates, although falling short of last year’s net income and margin numbers for the same period.

Farley angry on CNBC 9-14-23

Ford CEO Jim Farley said the company is seeing growth in some areas.

The company reported Q1 revenue of $42.8 billion, up 3% year-over-year even as vehicle shipments declined slightly. Net income for the period was $1.33 billion, which was slightly lower than the $1.76 billion from the year-ago period. Meanwhile adjusted earnings before interest and taxes, or EBIT, totaled $2.76 billion. That was also lower than the first quarter result from last year of $3.38 billion.

Even though the numbers were lower overall, Ford CEO Jim Farley noted the company was seeing growth in an important business.

“The Ford Pro team is growing volumes, revenue and profitability – including EBIT margin – and services capabilities,” he said. “We’re seeing real evidence of what’s possible for customers and the company across all our segments and applying what we’re learning about things like mobile services and value-added software to our retail businesses.”

All the right moves

The company’s Ford Pro unit saw a 36% jump in EBIT in the first quarter.

The company’s Operating cash flow in the period was $1.4 billion; adjusted free cash flow was a use of $500 million. Both reflected working capital effects from about 60,000 vehicles that were in inventory at the end of the first quarter, but are expected to be shipped in Q2.

CFO John Lawler said that the company’s balance sheet remains “rock solid,” with $25 billion in cash and nearly $43 billion in liquidity at quarter-end.

Ford’s continued strong performance and disciplined capital allocation enable the company to fund Ford+ initiatives while also meaningfully returning capital to shareholders — the latter at a targeted rate of 40% to 50% of adjusted free cash flow.

The results were good enough that Ford declared a second-quarter regular dividend of 15 cents per share, which is payable June 3.

Ford CFO John Lawler

Ford CFO John Lawler says said that the company’s balance sheet remains “rock solid.”

Additionally, the company noted its full-year adjusted EBIT is tracking to fall between the high $10 billion to $12 billion range. Additionally, the company adjusted its free cash flow target upward to between $6.5 billion and $7.5 billion. Despite having improved cash flow, the company clamped down its CapEx spend guidance to between $8 billion and $9 billion for the year. The company just reduced the top end of the range by $500 million.

Ford Pro going strong

Farley’s long touted the company’s Ford Pro business unit, which provides software and other assistance to fleet customers, with a focus on electric fleets.

The unit achieved first-quarter revenue of $18.0 billion, up 36%, together with EBIT of $3.0 billion.  The segment’s EBIT margin of nearly 17% exceeded the sustained mid-teens margin target set for the business.  The results reflected higher production of Super Duty trucks, officials said.

Ford Pro is helping expand the company’s money-losing electric vehicle efforts. The company noted more customers are choosing to electrify their vehicle fleets, including the United States Postal Service, which purchased 9,250 E-Transit vans through the end of 2024) and Ecolab, the global sustainability company, which added more than 1,000 F-150 Lightning pickups and Mustang Mach-E SUVs.


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