Ford Motor Delivers Earnings Beat with Higher Profits and Supplemental Dividend

DEARBORN, Michigan – Ford Motor reported higher-than-expected earnings and an optimistic outlook on Tuesday, driven by cost reductions and increased profits from its commercial car business. These results are projected to offset losses from electric vehicles, with a supplemental dividend of 18 cents per share announced by management.

The automotive revenue saw a 3% year-over-year increase to $43.2 billion, surpassing analysts’ estimates. Adjusted earnings per share fell 43% to 29 cents, surpassing the estimated 14 cents per share. Despite a drop in earnings before interest and taxes (EBIT), Ford’s shares rose approximately 6% in after-hours trading.

During the third quarter, Ford experienced a substantial increase in costs associated with warranties, which overshadowed the company’s transition towards a more adaptable and flexible approach. The focus on high-margin ICE and hybrid vehicles, while moderating investment in unprofitable EVs, aims to maximize profit and cash flows for the benefit of shareholders. As Ford addresses quality and warranty issues, its potential for profitability, particularly in the Ford Pro unit, becomes more evident.

Ford’s gasoline-powered and hybrid vehicle segment, known as Ford Blue, maintained flat revenues despite challenges such as the UAW strikes. On the other hand, the electric vehicle division, Ford Model e, saw increased sales but wider losses due to pricing and cost challenges. However, Ford Pro, which includes commercial vehicles and software services, remained a profitable unit for the company.

Looking ahead to 2024, Ford provided an upbeat outlook, expecting adjusted EBIT of $10 to $12 billion for the year. This forecast accounts for flat to modestly higher U.S. industry volume and lower pricing. The company plans to focus on quality improvements and cost reductions to drive profit growth, aiming for capital discipline and profitability.