Ford reported Q3 earnings after the market closed on Monday, beating Wall St income and EPS expectations. Nevertheless, the corporate remains to be dropping billions on its EVs. Right here’s a more in-depth have a look at Ford’s third-quarter 2024 earnings report.
Third-quarter earnings preview
Ford’s US retail gross sales rose 3% within the third quarter, with general gross sales up 1% in comparison with Q3 2023. Total car gross sales are actually up 2.7% via the primary 9 months of 2024.
Regardless of the expansion, Ford was outpaced by GM and Hyundai Motor Group (together with Kia and Genesis) in US electrical car gross sales.
Ford’s EV gross sales had been up 12%, with 23,509 autos bought in Q3. Nevertheless, with a file 32,095 EVs bought, a rise of 60% yr over yr, GM topped its crosstown rival. With 70,450 EVs bought, GM is now forward of Ford at 67,689.
GM topped estimates final week, reporting $48.8 billion in third-quarter income. Though the corporate doesn’t present a separate EV breakdown, it says it’s “nearing the crossover level to profitability for EV gross sales.”
After dropping one other $1.1 billion on its Mannequin e enterprise, Ford’s EV losses reached $2.5 billion via the primary half of 2024. Ford expects EV losses to achieve between $5 billion and $5.5 billion this yr.
Based on Estimize, Ford is predicted to report complete Q3 income of $45.2 billion with an EPS of $0.42.
Ford beats Q3 earnings, however EVs put a drag on earnings
Ford reported Q3 income of $46 billion and an Adjusted EPS of $0.49, topping Wall St estimates. This was Ford’s tenth consecutive quarter of YOY development.
- Q3 2024 Income: $46 billion vs $45.2 billion anticipated.
- Q3 2024 Adjusted EPS: $0.49 vs $0.42 anticipated.
In the meantime, Ford’s internet revenue slipped 25% to $900 million within the third quarter. The corporate mentioned the decrease earnings included a $1 billion “electric-vehicle associated cost” amid its technique shift.
The corporate’s business and software program enterprise, Ford Professional, continues to be the principle development driver, with quantity and income up 9% and 13%, respectively. The unit additionally generated $1.8 billion in working revenue with an EBIT margin of 11.6%.
Regardless of this, Ford’s electrical car enterprise continues to really feel the strain. Ford Mannequin e misplaced one other $1.2 billion in Q3.
Though income slipped 33% to $1.2 billion, Ford mentioned decrease materials and battery prices enabled it to attain almost $1 billion in price enhancements year-to-date.
The enhancements weren’t sufficient to beat “industry-wide pricing strain,” as Mannequin e losses reached $3.7 billion via the primary 9 months of 2024.
“We’re in a powerful place with Ford+ as our {industry} undergoes a sweeping transformation,” Ford’s CEO Jim Farley mentioned on Monday.
Farley mentioned the corporate has taken “robust motion” to create benefits in key areas like software program and next-gen EVs.
Ford expects to lose round $5 billion on its Mannequin e enterprise in 2024. The corporate now expects adjusted EBIT of round $10 billion, on the decrease finish of its $10 to $12 billion vary.
Ford’s inventory was down almost 5% following its Q3 earnings launch as buyers hoped for higher steerage.
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