Ford missed earnings expectations in Q2 due to higher warranty costs, stock fell 11%.

From CNBC: 2024-07-24 19:24:38

Ford Motor missed earnings expectations for the second quarter due to higher warranty costs, causing adjusted earnings per share to fall 35% to 47 cents, well below the 68-cent estimate. Ford’s automotive revenue increased 6% to $47.8 billion, beating forecasts, but adjusted EBIT decreased 27% to $2.76 billion, missing expectations. Despite progress in quality, Ford’s stock fell 11% in extended trading. The company’s electric vehicle division had weak results, with volumes down 23% and revenue falling 37% year-over-year. However, Ford Pro, the unit for fleet and commercial vehicles, delivered strong results with operating profits increasing 7% on an annual basis due to demand for Super Duty trucks and Transit commercial vans. Ford continues to expect adjusted EBIT of $10 billion to $12 billion for the year, despite trimming its outlook for Ford Blue due to higher warranty costs. The company raised its adjusted free cash flow outlook and remains in a strong liquidity position. Ford Model e continues to generate losses, but Ford Pro is expected to generate profits of $9 billion to $10 billion. Management raised its adjusted free cash flow outlook for the year and remains in a strong liquidity position. Ford’s quarterly results were disappointing, but the company faces challenges like warranty expenses that have plagued it for years. While management has made progress in quality improvements, the stock plummeted due to the unexpected costs, overshadowing the profitable opportunities present in the market. Ford continues to aim for higher earnings and cash flow, with a focus on dividends and buybacks for shareholders.



Read more at CNBC:: We’re downgrading Ford after automaker’s old issues cut into earnings