DETROIT – Ford Motor raised its earnings forecast for the year after surprising earnings in the second quarter, saying demand for profitable new vehicles like the Ford Bronco SUV will boost its performance.
Sales were slightly below expectations due to the ongoing global shortage of semiconductor chips, which continues to affect the automaker’s production. Ford said Wednesday that supplies of the critical parts are improving, but production of about 700,000 vehicles was lost in the second quarter.
Here’s how Ford fared compared to Wall Street expectations based on Refinitiv’s average estimates.
- Adjusted results: 13 cents per share, adjusted against a loss of 3 cents per share
- Automobile sales: $ 24.13 billion versus $ 24.25 billion
Ford increased its adjusted earnings before tax expectations for the full year by approximately $ 3.5 billion to $ 9 billion to $ 10 billion. Sales volume is expected to increase by around 30% from the first to the second half of the year, driven by an improvement in market factors, according to the company.
“Our Q2 results were better than expected,” said CFO John Lawler on a call on Wednesday. “We are ‘spring loaded’ for growth.”
The “spring-loaded” comment was a topic touted in the automaker’s revenue, citing strong demand, including reservations, for newly launched and upcoming vehicles.
Ford’s recent vehicle presentations ranged from the electric Mustang Mach-E crossover and the redesigned F-150 to two new Bronco models, including the “big Bronco” SUV. It also revealed and took reservations for an all-electric version of its F-150 pickup truck, slated to arrive mid-next year, and a new little pickup truck called the Maverick.
The results were in line with Ford’s updated guidance. The company announced that its adjusted pre-tax profit for the second quarter would exceed expectations and be “significantly better than a year earlier,” while net income would be “significantly lower” than the same period of the previous year.
The company reported net income of $ 1.1 billion and an adjusted pre-tax loss of $ 1.9 billion in the second quarter of 2020.
In April, Ford projected its adjusted pre-tax profit for the year to be between $ 5.5 billion and $ 6.5 billion, including a negative impact of approximately $ 2.5 billion from semiconductor shortages. This impact was the top end of a previously incurred loss due to the problem.
Aside from Ford’s profits and any change in forecast, Wall Street analysts will be looking for updates on CEO Jim Farley’s Ford + turnaround plan, semiconductor die shortage and new product launches.
Ford’s shares have more than doubled since Jim Farley became CEO in October, including up more than 50% this year.
