Ford quarterly profit up on strong truck demand but outlook measured

By Nathan Gomes, Joseph White and Paul Lienert

(Reuters) -Ford Motor Co on Tuesday posted robust first-quarter revenue and profit, thanks to strong demand for trucks and SUVs, but issued a measured full-year outlook tempered by continued losses in its electric-vehicle unit.

In a late briefing, Ford Chief Executive Officer Jim Farley said he hopes the company becomes “boringly predictable” at meeting investor expectations. Ford missed Wall Street estimates for the fourth quarter, leaving $2 billion on the table, Farley said earlier this year.

Farley also said Ford does not intend to pursue EV sales volume “at any cost” – after the automaker earlier in the day slashed Mustang Mach E prices for a second time this year.

Ford handily beat analysts’ expectations for first-quarter earnings before interest and taxes, reporting EBIT of $3.4 billion, compared with consensus of $2.4 billion.

The automaker reaffirmed guidance for full-year adjusted EBIT of $9 billion to $11 billion. Those numbers include an anticipated loss of $3 billion in Ford’s Model e electric vehicle unit.

Shares were down more than 2% in after-hours trading.

Although U.S. vehicles sales in April were much stronger than expected, Ford cautioned that “higher industrywide customer incentives as vehicle supply-and-demand rebalances” will be a “headwind” for profitability.

The company for the first time broke out financial results for its Ford Blue, Ford Pro and Ford Model e units. Ford Blue earnings before interest and taxes doubled to $2.56 billion, a margin of 10.4%, and Ford Pro EBIT nearly tripled to $1.4 billion, a margin of 10.3%.

Ford’s overall EBIT margin was 8.1%, after factoring in losses from Model e.

For 2023, the automaker expects full-year EBIT for Ford Blue to climb slightly to $7 billion, while Ford Pro EBIT could nearly double, to almost $6 billion.

Ford lost more than $60,000 per electric vehicle sold in the first quarter. Its combustion-vehicle business, Ford Blue, averaged pretax profit of $3,715 a vehicle, while the Ford Pro commercial business earned $4,053 per vehicle, based on the company’s financial data.

In a briefing, Chief Financial Officer John Lawler said the company is on track for its Model e electric vehicles to be EBIT margin-positive by the end of 2024. Ford expects the unit to post an EBIT margin of 8% by the end of 2026.

Lawler also said the macroeconomic outlook is “opaque at best” and that Ford expects continued pressure on pricing this year.

Prices for Ford’s combustion models, such as Bronco and Explorer, were flat year-over-year, Lawler said. Most of the pricing improvement Ford achieved during the quarter came from the company’s Ford Pro commercial vehicles.

Ford’s profit in the first quarter was $1.8 billion, or 44 cents per share, compared with a loss of $3.1 billion, or 78 cents per share, a year ago. Adjusted diluted earnings per share were 63 cents, compared with 38 cents a year ago. Analysts had expected 41 cents.

The Dearborn, Michigan-based company reported revenue of $41.5 billion for the quarter through March, compared with $34.5 billion a year ago.