Ford stock (F) stock rose more than 2% in morning trade after the legacy automaker reported fourth quarter results after the bell.
Yahoo Finance’s Pras Subramanian:
The automaker reported fourth quarter sales that easily topped expectations and projected a full-year profit outlook that beat estimates, though the company still sees more losses for its EV unit.
The results come after GM (GM) reported strong earnings and profit guidance last week that indicated strength in the overall US auto sector.
Ford reported top-line revenue of $46 billion vs. $40.35 billion estimated by Bloomberg, which is $2 billion more than a year ago despite the lingering effects of the United Auto Workers (UAW) strike in early Q4.
In terms of profitability, Ford reported adjusted earnings per share of $0.29 vs. $0.13 estimated, on adjusted EBIT (earnings before interest and taxes) of $1.1 billion, vs. the $988.2 million expected.
For the year, Ford notched $10.3 billion adjusted EBIT, at the higher end of its full-year 2023 adjusted EBIT outlook of $10 billion to $10.5 billion (which includes $1.7 billion in strike-related lost profits). Ford reinstated its 2023 profit outlook following the ratification of its labor deal with the UAW.
As for its 2024 full-year outlook, Ford projected adjusted EBIT of $10 billion to $12 billion—below Ford’s pre-UAW strike 2023 profit outlook of $11 billion to $12 billion, but higher than estimates of $9.24 billion. Ford rival GM issued 2024 profit guidance that matched its initial pre-UAW strike outlook for 2023.
“The guidance presumes flat to modestly higher full-year US industry volume, with overall lower vehicle pricing,” the company said in a statement.
Ford also declared a first quarter regular dividend of $0.15 per share and a supplemental dividend of $0.18 per share.
Ford CFO John Lawler said in a statement that Ford will improve capital efficiency by selectively reducing investments and “raising the bar” on expected returns for new initiatives.
“The objective is to improve total adjusted return on invested capital from about 14% in 2023 to 20% over the next couple of years,” Lawler said. “Simply ‘good’ isn’t good enough, and investments are going to projects that have credible plans to deliver their targeted returns.”