Ford (F) launched its second-quarter earnings on Wednesday. Though Ford beat top-line expectations with income up 6%, it missed Q2 2024 earnings expectations by a large margin.
Ford Q2 2024 earnings preview
After EV gross sales surged 61% year-over-year in Q2 2024, Ford remained the second best-selling EV maker within the US behind Tesla.
With practically 23,957 EVs offered within the second quarter, Ford topped rival GM, which offered 21,930 electrical fashions. All Ford EV fashions had double-digit YOY progress.
F-150 Lightning gross sales rose 77%, with 7,902 offered. Ford offered 12,645 Mustang Mach-E’s, up 46.5%. In the meantime, gross sales of Ford’s electrical van, the E-Transit, surged 95.5%, with 3,410 fashions offered in Q2.
Regardless of the progress, Ford has pulled again on a number of EV initiatives. The American automaker has minimize F-150 Lightning manufacturing, delayed round $12 billion in EV spending, and most lately introduced plans to construct extra Tremendous Obligation vehicles at its EV plant in Ontario.
Ford has stated the changes are as a result of “slower-than-expected” demand. In the meantime, like rival GM, Ford will lean extra towards hybrids. Ford’s hybrid gross sales additionally picked up in Q2, rising 55.6%.
After Ford’s new F-150 was delayed, F-series pickup gross sales fell 6%. Ford’s Ranger, Maverick, and Expedition led a restoration in truck gross sales (+4.5%).
Though Ford is projected to put up Q2 2024 earnings progress, it’s not anticipated to be as sturdy as rival GM. In response to Earnings Whispers, Ford is predicted to put up Q2 EPS of $0.64 with income of $41.65 billion.
Monetary outcomes
Ford posted Q2 2024 auto income of $44.8 billion, up 6% and beating projections. General income, together with Ford’s finance unit, reached $47.81 billion. In the meantime, web revenue was $1.8 billion, or $0.47 per share.
- Income: $44.8 billion vs $41.65 billion anticipated
- EPS: $0.47 vs $0.64 anticipated
With EBIT slipping 27% YOY to $2.67 billion, or 0.47 cents per share, Ford missed expectations by a large margin.
Ford Professional, its business and software program unit, remained the principle progress driver, with income climbing 9% to $17 billion. The unit posted a powerful EBIT margin at 15.1% with Q2 EBIT of $2.6 billion.
In response to Ford, its Professional enterprise is worthwhile in each area it operates. Ford Professional software program subscriptions had been up 35% within the quarter, whereas cellular restore orders greater than doubled.
Ford’s CEO Jim Farley stated it’s widespread for business clients to undertake new tech, together with related and EVs, earlier than people.
Talking of EVs, Ford’s mannequin e unit misplaced one other $1.1 billion within the second quarter. Ford Mannequin e income fell to $1.3 billion, whereas quantity was down 23% in Q2.
Ford’s EV losses are reached $2.5 billion via the primary half of 2024. The upper losses are as a result of decrease quantity and “industry-wide pricing strain.”
Ford Blue, the corporate’s ICE enterprise, noticed quantity and income rise 3% and seven%, respectively.
Full-year EBIT steering stays unchanged at $10 to $12 billion. In the meantime, Ford raised adjusted FCF expectations by $1 billion ($7.5 to $8.5 billion).
Ford nonetheless expects its Mannequin e EV enterprise to lose between $5.0 to $5.5 billion this yr. The corporate stated continued pricing strain and investments in next-gen EVs will contribute to the losses.
Ford’s inventory is down over 11% after hours following its earnings launch. Examine again for more information from Ford’s Q2 2024 earnings name at 5 PM.
Replace: On the corporate’s earnings name, Farley confused that Ford is specializing in smaller, extra worthwhile EVs. In response to Farley, the principle competitors is Tesla and low-cost opponents from China.
Farley stated the one method Ford can compete with BYD and others is thru its new platform, which is being developed by a “skunkworks” workforce in Lengthy Seashore.
The platform is central to Ford’s “extra life like and sharpened” EV plan to drive earnings. Farley stated the corporate won’t launch unprofitable EVs as the corporate works towards break even. Ford’s electrical van is already worthwhile, in line with Farley.
Farley stated Ford’s want to accomplice on EVs is at an all-time excessive. Though he didn’t provide any particulars, he stated to count on extra quickly.
Ford is betting on small EVs, software program, and its business enterprise to drive progress. Farley famous software program and subscriptions will help preserve progress if the economic system turns.