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Ford (F) earnings Q1 2021

Ford (F) earnings Q1 2021

Jim Farley, Ford CEO, takes off his mask at the Ford Built for America event at Ford’s Dearborn Truck Plant on September 17, 2020 in Dearborn, Michigan.

Nic Antaya | Getty Images

DETROIT – Ford Motor exceeded Wall Street’s expectations for the first quarter, but CEO Jim Farley warned that a persistent semiconductor die shortage would get worse before it gets better.

The company announced on Wednesday that it is now expected to lose about 50% of its planned production in the second quarter, up from 17% in the first quarter. According to the automaker, the increase is mainly due to a fire at the chip supplier Renesas Electronics for Ford and other automakers in Japan.

“We have more whitewater moments to navigate,” Farley told investors during the company’s first quarter earnings call. “The semiconductor shortage and the impact on production will get worse before it gets better.”

Ford CFO John Lawler was optimistic about the situation and said the company expected the semiconductor problem to bottom out in the second quarter and improve as the year progresses.

Lawler said the company expects to lose about 1.1 million production units in 2021 due to the shortage.

Ford’s shares were down about 3% in after-hours trading. The company’s market capitalization is more than $ 48 billion.

Here’s how Ford compared to Wall Street’s expectations based on Refinitiv’s average estimates.

  • Adjusted result: 89 cents compared to the expected 21 cents
  • Automobile sales: $ 33.55 billion versus $ 32.23 billion

The chip shortage has led automakers to set up lock factories around the world for different periods of time, resulting in vehicle inventories being scarce on dealer properties. However, the lower shipments have resulted in higher profits per vehicle, so automakers can continue to perform well despite the shortage.

Ford said Wednesday that adjusted pre-tax profit for the full year is expected to be between $ 5.5 billion and $ 6.5 billion, including an adverse effect of approximately $ 2.5 billion from semiconductor emissions. Adjusted free cash flow for the full year is projected to be between $ 500 billion and $ 1.5 billion.

The company had estimated it would post adjusted pre-tax profit of $ 8 billion to $ 9 billion in February. That didn’t take into account the semiconductor chip shortage, which the automaker has publicly stated could cut profits by $ 1 billion to $ 2.5 billion this year.

According to Lawler, Ford was able to offset the lost revenue from its reduced production in the first quarter with lower vehicle sales incentives, prioritizing production of more profitable vehicles and lower manufacturing costs, among other things. The automaker also benefited from higher profits from its Ford Credit funding arm.

Farley on Wednesday promised Ford would maintain lower vehicle inventories and support its profit per vehicle after the impact of the coronavirus pandemic and chip shortage.

The chip shortage is expected to cost the global auto industry $ 60.6 billion in revenue, according to consulting firm AlixPartners.

Correction: Ford kept its guidance for 2021. In an earlier version of the story, the instructions were given incorrectly.

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Ford slashes automobile manufacturing at six vegetation in North America as a consequence of chip scarcity

Ford F-150 production cut due to semiconductor chip shortage

Ford Motor is significantly reducing production at six plants in North America due to the ongoing global shortage of semiconductor chips, including facilities that make highly profitable pick-ups.

Measures vary by plant, but range from overtime cancellations to facilities closed for up to three weeks from April to June. Or a combination of both.

The affected plants are located in Illinois, Ohio, Kentucky, Michigan, Missouri, and Ontario, Canada. They manufacture a wide range of products – from F-150 pickups and vans to Ford Explorer SUVs and Ford Escape Crossovers.

Production of the F-150 in Dearborn, Michigan, will cease in the weeks of April 5th through April 12th, the company said. Ford is also canceling overtime at the factory in the weeks of April 26, May 10, May 31, and June 21. Another facility in Missouri that will manufacture the full-size F-150 will be shut down for a week starting Monday. Overtime at the plant will be suspended for eight weeks through most of June.

Semiconductors are key components that are used, among other things, in the infotainment, power steering and braking systems of new vehicles. With several plants closed due to Covid last year, suppliers turned semiconductors from automakers to other industries, creating a shortage after consumer demand fell more than expected.

Ford previously expected the shortage could cut its profits by $ 1 billion to $ 2.5 billion in 2021. Without releasing any new guidance, the company said it would “provide an update on the financial implications of semiconductor shortages” when it reports its first quarter earnings on April 28th.

This is a developing story. Check back soon for more updates.

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Some use Ford F-150 hybrid vans to energy properties

Some use Ford F-150 hybrid trucks to power homes

Randy Jones, of Katy, Texas, was using his 2021 Ford F-150 to power space heaters and other appliances throughout his home when it lost power during the winter storm earlier this week.

Source: Randy Jones

When Randy Jones of Katy, Texas bought his new Ford F-150 pickup a few weeks ago, he didn’t think he’d use it to turn on the lights in his home during a historic winter storm that left millions without power.

The on-board generator of the 2021 Hybrid “gives you the opportunity to use your truck like a mobile generator”, which according to Ford can generate an output of up to 7.2 kW.

In a phone interview with CNBC on Thursday, 66-year-old Jones said he bought the truck due in part to that feature, adding that it frequently loses power due to hurricanes and other storms. When he lost power on Sunday evening, he decided to take out a couple of extension cords and put the generator to the test.

“Without them, I would have been in the dark and cold like everyone else in the neighborhood,” said the retired refinery worker, adding that he was helping the neighbors charge their phones and laptops. “Quite a few neighbors said, ‘Hey, I’ll get one’, like ‘I’ll trade my Dodge or GMC’ because we always have power in South Texas with hurricanes and things like outages.”

Jones said he used the truck’s on-board generator for three days to power appliances in his home until electricity was restored on Wednesday.

He is not alone. Jerry Hall, 73, bought his new F-150 in late January. It turned out to be perfect timing, he said.

“The truck saved the day,” the Kerrville, Texas resident said in a telephone interview Thursday. Hall said his house lost power from Sunday evening through early Thursday. “Without the truck it would have been three miserable days.”

Hall said he and his wife still spent those days without a heater, but they were able to run extension cords from the truck into the house to power lights, the refrigerator, television, and other luxuries.

“It connected us to the outside world,” he said.

Hall said “the main reason” he bought the truck was because of its on-board generator. He said last spring’s harsh weather had resulted in power outages in his part of the state, and he knew he wanted some kind of generator. It just makes sense to get a new truck with a built-in generator.

Other truck owners have posted similar stories on an online F-150 owner forum. Photos from the forum were posted on Twitter, where Ford CEO Jim Farley commented and tweeted: “The situation in the American Southwest is so difficult. I wish everyone in Texas had a new F150 with a PowerBoost generator on board …”

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Ford invests $1 billion in German electrical car plant

Ford invests $1 billion in German electric vehicle plant

GEORGES GOBET | AFP | Getty Images

Ford is investing $ 1 billion in an electric vehicle production facility in Cologne. The European branch of the automotive giant is committed to going all-in for electric vehicles in the coming years.

In the plans announced on Wednesday morning, Ford said that its entire range of passenger cars in Europe would be “emission-free, fully electric or plug-in hybrid” by mid-2026 and an “all-electric” offering by 2030.

By investing in Cologne, the company is updating an existing assembly plant and converting it into a facility that focuses on the production of electric vehicles.

“Today’s announcement to rebuild our plant in Cologne, where we have been operating in Germany for 90 years, is one of the most significant that Ford has made in over a generation,” said Stuart Rowley, President of Ford of Europe in a statement .

“It underscores our commitment to Europe and a modern future, with electric vehicles at the heart of our growth strategy,” added Rowley.

The company also wants its commercial vehicle segment in Europe to be emission-free, plug-in hybrid or fully electric by 2024.

A “transformative” decade

With governments around the world announcing plans to move away from diesel and gasoline vehicles, Ford, along with several other major automakers, is looking to expand its electric offering and challenge companies like Elon Musk’s Tesla.

Earlier this week, Jaguar Land Rover announced that its Jaguar brand will be fully electric by 2025. The company, which belongs to Tata Motors, also said its Land Rover segment will introduce six “all-electric variants” over the next 5 years.

South Korean automaker Kia will launch its first dedicated electric vehicle this year. The German Volkswagen Group is investing around 35 billion euros in battery-electric vehicles and aims to bring around 70 fully electric models onto the market by 2030.

Last month, the CEO of Daimler told CNBC that the automotive industry was “in the midst of a change”.

“In addition to the things that we know well – to be honest, building the most coveted cars in the world – there are two technological trends on which we are doubling down: electrification and digitization,” Ola Källenius told CNBC’s Annette Weisbach.

The Stuttgart-based company has “invested billions in these new technologies,” he added, explaining that they would “drive our path to carbon-free driving.” This decade, he continued, was “transformative”.

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Ford says it would part out gasoline-powered automobiles in Europe.

Ford says it will phase out gasoline-powered vehicles in Europe.

Ford Motor was the youngest automaker to accelerate the transition to electric cars, and said on Wednesday that its European division will soon begin phasing out production gasoline-powered vehicles. The company will only offer electric and plug-in hybrid models until 2026.

The plan is part of an offer to achieve constant profits in Europe, where Ford has had problems for several years, and to meet increasingly stringent emissions standards in the European Union.

“We have successfully restructured Ford of Europe and returned to profitability in the fourth quarter of 2020,” said Stuart Rowley, President of Ford of Europe, in a statement. “Now we are storming into a fully electric future.”

Ford and other automakers are moving faster with electric vehicles in Europe than in the US. Last year, the European Union began to impose fines on automakers for not complying with carbon dioxide emissions limits, forcing them to sell more electric cars.

Ford said it plans to spend $ 1 billion on the overhaul of its main European facility in Cologne to manufacture electric vehicles. The first new model is slated to go into production in 2023, Ford said.

All Ford of Europe vans and commercial vehicles will be electric or plug-in hybrids by 2024, and two years later the entire range of vehicles will be electric or plug-in hybrids.

Last month General Motors announced that it would only produce electric vehicles until 2035, but GM nearly pulled out of Europe after selling its Opel division to Frances Peugeot SA in 2017. Peugeot recently teamed up with Fiat Chrysler and is now known as Stellantis.

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Activision, Snap, Ford & extra

Activision, Snap, Ford & more

During the E3 Electronic Entertainment Expo in Los Angeles, California, USA, on Tuesday, June 12, 2018, participants at the company’s booth will play the video game Call Of Duty: Black Ops 4 from Activision Blizzard Inc.

Troy Harvey | Bloomberg | Getty Images

Check out the companies that are making headlines in midday trading.

Ford – The legacy automaker’s stock rose 2% after Ford posted better-than-expected fourth-quarter earnings and informed investors of its plans for electric and autonomous vehicles. The company announced it would spend $ 29 billion on the new technology by 2025. However, sales for the fourth quarter fell short of expectations.

T-Mobile – The telecom company’s shares fell more than 3% despite an unexpectedly strong fourth quarter report. T-Mobile achieved a profit per share of 60 cents and a turnover of 20.34 billion US dollars. Analysts polled by Refinitiv had estimated 51 cents per share and sales of 19.93 billion US dollars. However, the company’s forecast for cash flow metrics in 2021 was not as expected, according to FactSet.

Peloton – Heimfahrrad stock fell more than 7% after the company outlined ongoing problems in the supply chain amid rising demand for its products. However, Peloton posted revenue growth of 128% for the second quarter of its fiscal year, grossing more than $ 1 billion in a single quarter for the first time in company history. Peloton earned 18 cents versus the street expected 9 cents profit. Revenue was $ 1.06 billion, according to Refinitiv, also above the expected $ 1.03 billion.

Activision Blizzard – The video game maker led the S&P 500 up nearly 10% on Friday after reporting fourth-quarter earnings and sales that exceeded Wall Street expectations. Rob Kostich, president of Activision Publishing, said Thursday night that his Call of Duty franchise, including the free Warzone, was a major driver of the company’s 2020 business, and that the game “will be at the forefront” and Center for us for a long time. “

Snap – The social media company saw its shares surge nearly 6% after beating expectations for earnings, revenue, and user growth. According to Refinitiv, Snap achieved adjusted earnings per share of 9 cents, down from 7 cents that analysts had expected. However, the company issued a slight forecast for the first quarter, warning that Apple’s privacy changes “could pose another risk of disruption to demand.”

Estee Lauder – The makeup company saw its shares surge 7.5% in mid-day trading after seeing surprising revenue gains in the second quarter of the fiscal year instead of the expected decline. Estee Lauder said stronger Asia Pacific sales and online sales drove sales growth. Revenue in America declined in the second quarter from $ 1.23 billion a year ago to $ 1.05 billion.

– CNBC’s Yun Li, Maggie Fitzgerald, and Jesse Pound contributed.

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Ford will not ‘cede the longer term to anybody’ on electrical automobiles: CEO Farley

Ford won't 'cede the future to anyone' on electric vehicles: CEO Farley

Ford Motor CEO Jim Farley on Friday touted the automaker’s strategy for electric vehicles and told CNBC that the company intends to compete strongly in the growing market.

Farley’s comments on “Squawk on the Street” came a day after Ford reported better-than-expected earnings in the fourth quarter. As part of that announcement, Ford said it would increase its electric vehicle investment to $ 22 billion by 2025, almost double what it had previously promised.

Ford’s shares rose 2.7% on Friday to around $ 11.70 apiece.

“We won’t leave the future to anyone,” Farley told CNBC’s Phil LeBeau. “Our electric strategy is very specific. We will invest in segments where we are the dominant player and we have economies of scale like the F-150, the transit van and our Mustang.”

As Ford provides new capital for the years to come, Farley said the company’s EV transition is now yielding results, pointing out that its all-electric Mustang Mach-E crossover has hit showrooms. He said he viewed the Mach-E as a “credible competitor” to Tesla’s compact SUV known as the Model Y.

Ford’s all-electric transit van is expected to arrive by the end of this year, Farley said, and the company’s work on a Michigan plant to build the electric version of its best-selling F-150 is ongoing. “This is the year. We’re not talking about aspirations,” said Farley, who took over the business on October 1.

The charging connection for the Ford E-Transit is located in the radiator grille of the vehicle.

ford

Wall Street’s focus on electric vehicles has increased. A number of players in space, including battery manufacturers and charging station companies, have gone public in the past few months. Ford’s Crosstown rival General Motors has also drawn street attention for its aggressive investments in electric vehicles. GM said last week it plans to cease production of all diesel and gasoline-powered cars, trucks and SUVs by 2035.

Before the announcement, Adam Jonas, an analyst at Morgan Stanley, told CNBC that GM, led by CEO Mary Barra, may be orchestrating “one of the most profound strategic turns not only in the auto industry, but also in the economy.” GM stocks are up more than 100% in the past six months, while Ford’s stocks are up more than 65% over the same stretch.

As the production and adoption of electric vehicles increases, some have raised concerns that there could be a battery shortage. Farley acknowledged that the company “needs to make sure when Ford ramp up EV manufacturing” [battery] Care so that we don’t end up in a situation where we are in chips. “Ford had to temporarily cut F-150 production to respond to an ongoing semiconductor shortage affecting the global automotive industry.

“That will be due to each manufacturer making the commitment,” Farley said. “We have to make our own decisions about vertical integration. Our $ 22 billion [EV investment] doesn’t even include that. You could expect more news from us on this vertical integration. “

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Ford F-150 manufacturing reduce resulting from semiconductor chip scarcity

Ford F-150 production cut due to semiconductor chip shortage

Ford began resuming vehicle production in the U.S. on May 18, 2020 with new coronavirus safety protocols like health assessments, personal protective equipment, and changes to facilities to increase social distancing.

ford

DETROIT – Ford Motor is significantly reducing production of its highly profitable F-150 pickup trucks due to a persistent shortage of semiconductor chips in the global automotive industry.

The automaker announced Thursday that its Dearborn, Michigan truck plant will decrease from three to one shift for one week starting Monday, while truck production at its Kansas City, Missouri assembly plant will decrease from three to two shifts. Ford spokeswoman Kelli Felker said both plants are expected to return in three shifts by the week of February 15.

“We are working closely with suppliers to address potential production constraints associated with global semiconductor shortages and to prioritize key vehicle lines for production and make the most of our semiconductor allocation,” she said in a statement sent via email.

Ford shares appeared unaffected by the cuts, rising about 3% during intraday trading late Thursday morning. The automaker is expected to announce its fourth quarter results and forecast for 2021 after the market closed on Thursday.

Automakers and suppliers warned of a semiconductor shortage late last year after vehicle demand rose faster than expected following a two-month shutdown of production facilities due to the coronavirus pandemic.

Semiconductors are extremely important components of new vehicles in areas that range from infotainment systems to more traditional parts like power steering. They are also used in consumer electronics.

Ford’s confirmed plans come a day after General Motors announced it would cease production at four assembly plants in Fairfax, Kansas, next week. Ingersoll, Ontario; and San Luis Potosi, Mexico. GM will also operate a half capacity plant in South Korea this week.

Ford and other automakers – from Nissan Motor to Volkswagen – previously stopped vehicle production due to the shortage of chips.

Kumar Galhotra, Ford President for the US and International Markets, described the chip shortage earlier this week as a “very dynamic situation”. He said the company had been working with its suppliers to reduce the impact on its plants and resolve the issue as soon as possible.

“It’s changing all the time, but we believe we will look into it for at least the first half of this year,” he told CNBC.

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Ford, IBM, Intel and Seagate

Ford, IBM, Intel and Seagate

The IBM logo is displayed on a smartphone.

Rafael Henrique | SOPA Pictures | LightRocket | Getty Images

Check out the companies that are making headlines in midday trading.

Ford – The US automaker’s shares fell about 1%, pulling back from an all-time high in the previous session. The stock rose 6.2% on Thursday after Deutsche Bank and Barclays issued positive comments on Ford’s product plans and reported fourth quarter results on February 4. JPMorgan overweighted Ford from equilibrium to Ford on Friday. The stock gained more than 16% this week, making it its best week since June.

IBM – IBM stocks fell 10% after earnings report, which saw revenue decline more than analysts’ expectations. According to Refinitiv, IBM had fourth-quarter revenue of $ 20.37 billion, missing estimates of $ 20.67 billion. However, the result exceeded estimates.

Intel – The chipmaker’s shares fell more than 8% despite the company’s better-than-expected fourth-quarter results. Intel had adjusted earnings per share of $ 1.52 on revenue of $ 20 billion, beating Wall Street’s expectations of $ 1.10 per share and $ 17.49 billion in revenue, according to Refinitiv . Part of the stock price decline was the reverse of a surge in Thursday’s late session that followed an early release of Intel’s results.

CSX Corp. The railroad company’s shares were down more than 2% despite CSX beating revenue and earnings estimates in the fourth quarter. The company reported adjusted earnings per share of $ 1.04, 3 cents above consensus guidance. FactSet estimates that sales were $ 2.83 billion, above the expected $ 2.77 billion.

Seagate Technology – Seagate shares fell nearly 6% despite decent mid-day earnings results. The downward pressure is also likely due to the already high expectations analysts and investors had of the company prior to the quarterly report. Wedbush analyst Matt Bryson wrote on Friday morning: “Without a clear driver for short-term upside moves or the certainty of longer-term technological advantage, we maintain our neutral view of the name.”

PPG Industries – The paint maker’s stock also fell in mid-day trading, despite earnings and sales beating expectations for the fourth quarter. Sam Hudson, an analyst at Atlantic Equities, noted that the company had failed to provide guidance for fiscal 2021 and wrote that a recent rise in raw material costs could affect second quarter results.

– CNBC’s Pippa Stevens, Yun Li, Maggie Fitzgerald and Jesse Pound contributed to the coverage

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Ford to spend $610 million to recall three million autos

Ford to spend $610 million to recall 3 million vehicles

A visitor walks past a Ford Escape Titanium at a car show last April.

Greg Baker | AFP | Getty Images

DETROIT – Ford Motor will recall 3 million older vehicles due to possible problems with their airbag inflators, costing the automaker an estimated $ 610 million.

The company confirmed the cost in a petition filed with the Securities and Exchange Commission Thursday after the closing bell. Ford stock fell into the red during after-business trading, down about 2%. The stock rose 6.2% on Thursday to $ 11.53 per share – its highest closing price since June 2018. Ford’s market capitalization is more than $ 45 billion.

In the filing, Ford said the expense will be treated as a special item as part of its earnings for the fourth quarter on February 4th. This means he has no impact on Ford’s adjusted earnings before interest and taxes or adjusted earnings per share – closely watched items from Wall Street.

The National Highway Traffic Safety Administration turned down a 2017 petition from Ford on Tuesday to avoid recalling the vehicles carrying the potentially dangerous airbags made by auto supplier Takata.

The affected vehicles range from model years 2006 to 2012. These include Ford Ranger (2007-2011), Fusion (2006-2012), Edge (2007-2010), Lincoln MKZ / Zephyr (2006-2012), MKX (2007-2010 )) and Mercury Milan (2006-2011) vehicles.

The recall will affect approximately 2.7 million vehicles in the U.S. and approximately 300,000 in Canada and other locations, the company said.

Takata airbag inflators have been a constant issue for automakers for years. The failure can cause airbag inflators to burst and potentially deadly metal objects to fly inside the vehicle. The problem has been linked to the deaths of at least 27 people worldwide and 18 in the US, according to Reuters. The more than 67 million inflators problem is the largest automobile recall in US history