Ford Motor Co.’s investing big in electrification, but its Ford Model e business reported a big loss for the first quarter while its two other business units, Ford Blue and Ford Pro, brought home the cash, leading the automaker to a $1.8 billion Q1 profit.
The company reported revenue of $41.5 billion, an increase of 20% year-over-year, for the first three months of 2023. The company’s earnings before interest and taxes, or EBIT, came in a $3.4 billion, or 63 cents per share, which is a 45% increase over the same period last year.
Ford took a big hit during the first quarter of 2022 when they took a charged because of a change in the mark-to-market value of the company’s investment in Rivian. After the charge, the company’s loss $3.1 billion. The adjusted EBIT for Q1 2022 was $2.3 billion, so Rivian aside, on an adjusted basis, Ford outperformed its Q1 results from last year.
“We’re bringing Ford+ to life by zeroing in on what distinct customers need and value the most,” said Farley. “Ford Pro is leading the way on profitable growth, our big investments in iconic Ford Blue vehicles and derivatives are winning with customers, and Ford Model e’s different approach to EVs is significantly reducing costs on our first high-volume products while rapidly developing breakthrough next-generation vehicles from the ground up.”
Sell big, earn big
The company said it sold 1.1 million vehicles in the January-to-March period, a 9% increase over 2022’s numbers for the same timeframe. Officials said Ford was the best-selling vehicle brand in the quarter.
Profitability in the quarter was enhanced by a favorable mix of products, higher net pricing and increased volume and was broadly based geographically. The Ford Blue and Ford Pro business segments were both profitable in every region where they operate, the company noted in its release.
In fact, the profitability was critical to the company’s positive results for the quarter as its Ford Model e — its electric vehicle business unit — reported a $722 million loss on an adjusted basis on revenue of $700 million.
Conversely, Ford Blue, the company’s gas- and hybrid-powered wing, had first-quarter revenue of $25.1 billion, EBIT of $2.6 billion and an EBIT margin of 10.4%, all up sharply from a year ago. Additionally, Ford Pro, the commercial customer services unit, also posted in the black, with $13.2 billion in revenue and EBIT of $1.4 billion with an EBIT margin of 10.3%.
While Ford’s future is electric, its profits now are gas and customer service. That said, the company is moving ahead with its all-electric portfolio.
In March, Ford introduced the new, all-electric Explorer crossover that will be built and sold in Europe – another step toward making and selling EVs 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 Dearborn, Michigan-based company’s boosting capacity of its best-selling EVs the Mustang Mach-E, F-150 Lightning and E-Transit. Additionally, Ford is investing heavily in its Model e home, BlueOval City, where it will manufacture its next-generation electric pickup in Stanton, Tennessee; transform an existing operation in Oakville, Ontario, to produce batteries and next-generation EVs; and construct and staff an LFP battery plant in Marshall, Michigan.
Staying the course
The strong results have Ford sticking to its full-year guidance forecast from earlier this year with adjusted EBIT of $9 billion to $11 billion and adjusted free cash flow of about $6 billion.
Additionally, the company reaffirmed 2023 segment-level EBIT expectations: about $7 billion for Ford Blue, up modestly from last year; a full-year loss of about $3 billion for Ford Model e; and EBIT approaching $6 billion for Ford Pro, which would be nearly twice its 2022 earnings.
The company did say it was facing some economic global uncertainty, higher customer incentives as inventory levels rise and lower profits from Ford Credit, but on a positive note the company’s supply chain is expected to continue improving, its selling more vehicles and costs of goods and materials are falling.