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Ford earnings: Automaker easily beats on Q4 revenue; 2024 profit outlook tops expectations

Ford’s stock (F) saw a boost in after-hours trading following the release of its fourth-quarter sales report, which surpassed expectations. Despite projected losses in its electric vehicle (EV) unit, the company provided a positive outlook for full-year profits, echoing the strong performance of its competitor, GM (GM), and suggesting a healthy automotive sector in the US.

In the fourth quarter, Ford’s revenue reached $46 billion, well above Bloomberg’s estimate of $40.35 billion, marking a notable $2 billion increase from the previous year despite challenges like the United Auto Workers (UAW) strike. Furthermore, Ford’s adjusted earnings per share of $0.29 outpaced the estimated $0.13, with adjusted EBIT hitting $1.1 billion, compared to the expected $988.2 million.

For the full year, Ford achieved adjusted EBIT of $10.3 billion, landing at the higher end of its 2023 outlook despite $1.7 billion in strike-related losses. Looking ahead to 2024, Ford projected adjusted EBIT of $10 billion to $12 billion, slightly below its pre-strike 2023 profit outlook but surpassing estimates.

Alongside its financial performance, Ford announced a regular dividend of $0.15 per share for the first quarter and a supplemental dividend of $0.18 per share.

Ford’s CFO, John Lawler, emphasized the company’s commitment to enhancing capital efficiency by selectively reducing investments and demanding higher returns for new initiatives. The goal is to raise the total adjusted return on invested capital from around 14% in 2023 to 20% in the coming years.

Ford’s business units, including Ford Blue for traditional gas-powered vehicles, Ford Model e for EVs, and Ford Pro for commercial and Super Duty trucks, showed mixed performance in the fourth quarter. Notably, Ford Model e reported significant losses due to competitive pricing and investments in next-generation EVs.

Despite challenges in the EV market, Ford’s CEO, Jim Farley, remains optimistic about the company’s future. Plans are underway to develop profitable next-gen EVs and smaller, more affordable models to meet consumer demand. Additionally, Ford is exploring the creation of a low-cost EV platform to compete with Tesla.

While EV sales saw a decline in January, overall auto sales remained strong, particularly in the trucks segment. Hybrid and EV sales also showed promising growth, reflecting increasing consumer interest in sustainable vehicles.

Moving forward, Ford aims to capitalize on the success of its truck business and continue expanding its hybrid and EV offerings to meet evolving market demands.

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