Ford (F) earnings Q3 2021

DETROIT – Ford Motor practically doubled Wall Avenue’s earnings expectations and barely beat income projections for the third quarter, main the automaker to extend its annual steering for the second time this 12 months.

This is how Ford carried out versus what Wall Avenue anticipated primarily based on common analyst estimates compiled by Refinitv.

• Adjusted EPS: 51 cents per share adj. vs. 27 cents per share anticipated
• Automotive income: $33.21 billion vs. $32.54 billion anticipated

Ford’s shares jumped by greater than 8% throughout after-hours buying and selling. The inventory closed Wednesday down by 2.7% to $15.51 a share.

Ford on Wednesday additionally stated it could reinstate its common dividend beginning within the fourth quarter, greater than a 12 months and a half after suspending the funds throughout the early days of the coronavirus pandemic.

The automaker’s new full-year adjusted earnings steering is between $10.5 billion and $11.5 billion, up from between $9 billion and $10 billion. Ford maintained its expectations for adjusted free money move of between $4 billion and $5 billion.

Baked into the brand new steering are expectations for the fourth-quarter that embody a rise in wholesale shipments from the third quarter, mixed with a continued wholesome mixture of automobiles bought and web pricing. These beneficial properties are anticipated to be towards sequentially decrease outcomes from its finance arm, Ford stated.

“The outcomes are displaying, actually, the underlying energy of our enterprise,” Ford CFO John Lawler instructed reporters Wednesday throughout a name.

The corporate elevated annual steering regardless of Lawler beforehand saying the second half of the 12 months could be weaker than the primary six months. He had cited $3 billion to $4 billion in favorable larger gross sales volumes, however stated commodity prices, decrease earnings from Ford Credit score and different elements equivalent to $500 million in larger guarantee prices to tug down its outcomes throughout the again finish of the 12 months.

Ford cited sturdy demand for newer merchandise such because the Bronco SUV and Mustang Mach-E, which the corporate stated may attain 200,000 models in gross sales globally a 12 months.

“I imagine we’ve got the fitting plan to drive development and unlock unprecedented worth,” Ford CEO Jim Farley instructed buyers Wednesday throughout a name. “You are already seeing favorable change within the slope of our earnings and money move. There’s extra to return.”

On an unadjusted foundation, Ford’s web revenue was $1.8 billion in contrast with $2.4 billion a 12 months earlier, when dealerships and crops largely reopened after being shuttered throughout a number of the second quarter because of the coronavirus pandemic. The automaker reported pretax adjusted earnings of $3 billion for the third quarter, down from $3.6 billion a 12 months earlier.

Its automotive income was down 5% throughout the quarter in comparison with $34.7 billion within the third quarter of 2020.

For 2022, Ford declined to present monetary steering, however Lawler stated the corporate expects the chip scarcity to proceed into 2022 and probably, to a far lesser extent, into 2023. He stated Ford expects a ten% improve in wholesale car volumes in 2022 in comparison with this 12 months, because the semiconductor scarcity continues to impression the enterprise.

Lawler additionally stated the automaker expects commodity prices to be up $3 billion to $3.5 billion for 2021, and will improve one other $1.5 billion in 2022.

Ford obtained a pair bullish calls from Wall Avenue analysts heading into earnings, together with an improve by Credit score Suisse to outperform from impartial.

Ford’s largest American rival, Normal Motors, reported third-quarter earnings Wednesday morning that beat Wall Avenue’s estimates. Regardless of the beats, GM’s inventory declined by greater than 5% throughout intraday buying and selling because of the automaker decreasing free money move steering for the 12 months and never assembly some investor expectations for the rest of the 12 months.

Individually, Farley on Wednesday stated Ford would delay an over-the-air rollout of its BlueCruise hands-free freeway driving from this 12 months till the primary quarter of subsequent 12 months. The know-how is seen as a brand new recurring income alternative and to catch up technologically with different techniques from opponents equivalent to GM and Tesla.