Ford reported Earnings for the first quarter 2023 Tuesday after the bell, marking the first time the longtime automaker has split its earnings by three new business units: Ford Blue’s popular gas-and-hybrid cars, Ford Model E electric cars, and Ford Pro Commercial Products and Services. .
The automaker reported revenue of $41.5 billion, beating Wall Street’s forecast of $36 billion, and showed a 20% improvement over the same period last year. Although Ford pushed to electrify its fleet, that cadence was largely driven by commercial vehicle sales and gas-powered vehicle sales.
Ford’s net income on a GAAP basis was $1.8 billion, compared to a net loss of $2 billion in the 2022 period due to a $7.3 billion reduction in investments in the automaker Rivian.
On an adjusted earnings basis, Ford reported earnings of $3.4 billion, an increase of 45% from the first quarter of 2022 and a margin of 8.1%.
Ford’s guidance for the full year remained unchanged at between $9 billion and $11 billion in adjusted earnings. The company expects to have adjusted free cash flow of about $6 billion in 2023.
By sector, Ford expects 2023 to see $7 billion for Ford Blue, up slightly from last year; a full year loss of about $3 billion for the Model e; And EBIT of about $6 billion for Pro, which is double 2022 earnings.
Ford said operating cash flow for the quarter was $2.8 billion, and that it generated $693 million of adjusted free cash flow. The automaker closed the quarter with nearly $29 billion in cash on hand.
The collapse of Ford’s business sectors
This is the first quarter in which Ford has split earnings across its three business units: Ford Blue, Ford Model e and Ford Pro. Image credit: Ford Motor Company
Ford is still making a loss in its electric vehicle business, which it often describes as an “emerging company.” The unit brought in $700 million in revenue, down 27% from last year, attributed in part to production outages in two of Ford’s most popular electric vehicles: the F-150 Lightning Pickup and Mustang Mach-E SUV. Ford said that production of the Mach-E has been halted due to “industrial changes that will nearly double manufacturing capacity,” which probably explains Ford’s latest model. Low price of the car.
This is the second time Ford has owned it Reduced price on the Mach-E this quarter. The first time was in January and similar price cuts from Tesla followed.
Ford aims to sell electric vehicles at a global run rate of 600,000 units by the end of 2023 and more than 2 million by the end of 2026. The automaker will have to build and ship quickly if it wants to meet that goal. Ford only It reported 10,866 EV units Sold out in the first quarter of this year.
Despite the losses in the Model e, Ford’s other two units were more than enough to push the automaker into growth territory. Ford said its Ford Blue and Ford Pro business segments were profitable in every region in which it operated. The automaker shipped 1.1 million vehicles in the quarter, up 9% year-over-year, with the majority of sales coming from Ford’s gas-, hybrid- and electric-commercial trucks and SUVs, according to the company.
In the first quarter, Ford Blue generated $25.1 billion in revenue, up 21% year-over-year. On an adjusted basis, that’s $2.6 billion. The automaker says it expects to continue to see high growth in this segment.
Ford Pro reported $13.2 billion, up 28% from last year. In terms of EBIT, it’s $1.4 billion, 3 times more than reported in 2022. This growth was driven by sales of Ford’s Transit and E-Transit commercial vans, as well as a 64% increase in paid software subscriptions in the first quarter.
The automaker’s pre-tax credit earnings were $303 million, which was down from a year ago due to lower financing margins, higher credit losses and lower rental income, according to Ford.