Ford posts stellar first quarter, boosted by fleet and legacy truck divisions

DETROIT — Ford Motor on Tuesday reported first-quarter results that significantly topped Wall Street’s estimates, as the automaker’s fleet and legacy operations outweighed growing losses in electric vehicles.

Despite the significant beat, Ford maintained its previously announced 2023 guidance, and the stock ticked lower in extended trading.

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Ford finance chief John Lawler said the quarter was a “peek at what’s possible to generate value and growth.” His comments come months after CEO Jim Farley said the company failed to capitalize on $2 billion in additional profits last year due to “execution issues.”

Here’s how Ford did during the quarter, compared with what Wall Street expected based on average estimates compiled by Refinitiv:

  • Earnings per share: 63 cents, adjusted, vs. 41 cents expected
  • Automotive revenue: $39.09 billion vs. $36.08 billion expected

Farley said during the earnings call that the company had a “solid quarter while making real progress on our Ford+ growth plan.”

“I hope that becomes a trend at Ford, boringly predictable when it comes to execution and delivering financials, but extremely ambitious in dynamically creating the Ford of the future,” Farley said.

The company reiterated it expects full-year adjusted earnings between $9 billion and $11 billion and roughly $6 billion in adjusted free cash flow. Ford said it plans to have capital expenditures of between $8 billion and $9 billion in 2023.

Ford also reconfirmed it expects to lose about $3 billion from its electric vehicle operations, known as Model e, in 2023. Ford said the operations’ loss widened to $722 million in the first quarter from $380 million a year earlier as it ramps up EV production.

Those losses were washed out, however, by the company’s traditional car business, known as Ford Blue, which earned $2.6 billion, and the automaker’s Ford Pro fleet operations, which reported $1.4 billion in earnings. The automaker said both business segments were profitable in every region where they operate.

Lawler reconfirmed the automaker expects Model e to report a positive EBIT margin of 8% by the end of 2026, including its first-generation EVs by 2024.

Ford is reporting its quarterly financial results by business unit, instead of by region, for the first time. The Detroit automaker earlier this year released revised results for 2021 and 2022 according to the new structure.

Wall Street is closely monitoring the Model e EV unit in addition to any comments on EV pricing following Tesla price changes. Ford earlier Tuesday said it would again cut the starting prices of its electric Mustang Mach-E by thousands of dollars, as it increases production and reopens order banks for the crossover.

“It’s a competitive segment, and we’re working on cost reductions,” Lawler told reporters after the company’s quarterly results. Ford expects $5,000 in build-cost reductions on average. He said some models switching to lithium-iron phosphate batteries from lithium ion should assist in such reductions.

For the first quarter, Ford reported net income of $1.8 billion, or 44 cents per share, compared to a net loss of $3.1 billion, or 78 cents per share, during the year-earlier period. Results last year were dragged down by a one-off charge related to its investment in EV startup Rivian.

Total revenue, which includes the impact of Ford Credit, grew 20% year over year to $41.5 billion, the company said.

There was additional pressure on Ford’s first-quarter results after crosstown rival General Motors last week raised key guidance for 2023 and reported results that topped Wall Street’s forecasts for both revenue and earnings.

GM raised its adjusted earnings expectations to a range of $11 billion to $13 billion, or $6.35 to $7.35 a share, and expectations for adjusted automotive free cash flow to between $5.5 billion and $7.5 billion.

Despite GM’s results and guidance raise its shares notably fell last week as Wall Street analysts remained skeptical about the company’s ability to perform amid broader economic challenges and an automotive industry that’s normalizing away from pricey vehicles and record profits.

Ford’s Lawyer said “there will definitely be some pressure on pricing” regarding the automaker’s legacy operations, as supply and demand normalize. Pricing for the automaker was level during the first quarter, he said.

— CNBC’s Michael Bloom contributed to this report.

Correction: Analysts polled by Refinitiv expected Ford to report first-quarter automotive revenue of $36.08 billion. An earlier version misstated the estimate.