On April 24th local time, Ford reported a 3% year-on-year increase in first-quarter revenue.
Ford noted that its commercial vehicle business performed strongly, making a profit before interest and tax of $3 billion, allowing the company to maintain revenue growth despite falling car deliveries.
Ford CEO Jim Jim Farley found many signs of improvement in the first quarter, laying the foundation for strong future growth.
John Lawler, Ford’s chief financial officer, said it was a “very solid quarter”.
Ford’s commercial vehicle business profit offset losses in its electric vehicle business.
Ford’s first-quarter revenue rose 3% year-on-year to $42.
8 billion, while net profit fell 24% year-on-year to $1.
3 billion.
First quarter adjusted earnings before interest and tax reached $2.
8 billion, down 18% from a year earlier.
Overall, Ford’s sales of trucks and other commercial vehicles pushed its first-quarter profit ahead of Wall Street expectations, offsetting losses in its electric vehicle business.
Of this total, the profit of Ford’s internal combustion engine and hybrid vehicle business Ford Blue was $905 million, down 65% from a year earlier, mainly due to delays in shipments of about 60, 000 Fmuri 150 vehicles caused by long quality inspections.
However, Mr Farley said Ford had delayed shipments of the new Fmur150 by three to six weeks, avoiding “about 12” recalls.
Ford’s electric vehicle business, Model e, lost $1.
3 billion in the first quarter, up 83 per cent from a year earlier.
Ford executives blame price pressures for the decline in wholesale delivery and expect the business to lose between $5 billion and $5.
5 billion before interest and tax this year.
Ford’s commercial vehicle business Ford Pro made a profit of $3.
01 billion in the first quarter, up 120% from a year earlier.
profit margin before interest and tax was close to 17%.
revenue surged 36% year-on-year to $18 billion, mainly due to increased production of Super Duty pick-up trucks and Transit commercial vehicles.
Ford Credit made a profit of $326 million, roughly the same as a year ago.
Lawler said on a conference call that he thought it was a “very healthy quarter” for Ford.
Photo: Ford, based on this, Ford raised its forecasts for free cash flow and capital expenditure.
Ford raised its free cash flow target this year by $500m to $6.
5 billion-$7.
5 billion, while capital expenditure will be no more than $9 billion, slightly smaller than the previous estimate of $8 billion-$9.
5 billion.
Adjusted EBIT is expected to remain unchanged at $10 billion-$12 billion, although the company said it was moving towards the high end of that range.
Lawler also revealed that Ford is expected to cut costs by about $2 billion in manufacturing and other areas this year, mainly in the second half of the year.
In a positive sign for Ford, Farley said on Ford’s first-quarter earnings call that the Ford+ growth plan “showed a lot of good signs in the first quarter” and “laid the foundation for our strong development in 2024 and beyond.
” First of all, Ford has made progress in addressing the cost of warranty.
Ford has faced rising warranty costs for years, including $1.
9 billion in 2023, which has affected its profitability.
Ford said last year that it had a disadvantage of $7 billion to $8 billion a year compared with traditional competitors because of production costs, quality problems and other operational inefficiencies.
Ford suspended shipments of Fmai 150 pickup trucks for most of the first quarter to address undisclosed quality problems.
While Ford Blue’s sales and performance were affected, Mr Farley said Ford avoided “about 12 recalls” because of additional quality checks during the suspension, which helped reduce the company’s warranty costs.
Farley hopes that Ford’s changes to its new car launch process will help the company reverse its quality dilemma.
In the long run, as a result of this new process, the number of recalls will be reduced and the cost of warranty will be reduced.
I am proud of the progress of the team.
We still have a lot of work to do.
” Ford executives said that in order to eradicate costly quality problems, Ford is likely to launch new cars more slowly and cautiously in the future.
Photo: Ford, in addition to its achievements in warranty costs, Ford is also adjusting its strategy to cope with the overall market situation.
Growth in global electric vehicle sales is slowing.
Electric vehicles have proved difficult not only for traditional carmakers like Ford, but also for pure electric carmakers like Tesla.
Tesla recently announced that it would cut jobs by more than 10 per cent worldwide and reported that quarterly revenue fell for the first time since the COVID-19 epidemic.
In this case, on the one hand, Ford is still committed to reducing the cost of electric vehicles, and the production cost of electric vehicles is expected to continue to decline.
However, this will be largely offset by huge pricing pressure from industry competitors.
On the other hand, in the short term, hybrid vehicles are Ford’s top priority in order to make it easy for customers to enter the future of pure electric vehicles.
Ford aims to increase hybrid sales by 40% this year and quadruple it in the next few years.
In addition, Ford has postponed some electric vehicle plans to better meet consumer demand.
Ford has delayed production of three-row cross-border cars by about two years to give priority to smaller, more affordable models.
Ford executives say they will not launch the next generation of Ford electric vehicles until they are profitable.
At the end, a day before Ford reported results, its US rival General Motors reported strong first-quarter results and raised its full-year 2024 forecast.
However, some analysts are cautious about the overall economic environment of Ford and other automakers.
“as car inventories are currently high and interest rates remain high for a long time, we expect new car prices to continue to be under pressure and incentives to continue to increase,” CFRA Research analyst Garrett Nelson said in a research note.
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