Ford CEO Jim Farley at the company’s Dearborn, Michigan, plant where it’s building the electric F-150 Lightning on April 26, 2022.
CNBC | Michael Wayland
Ford Motor Company said that its adjusted operating income more than tripled from a year ago, to $3.7 billion, as it was able to overcome lingering supply-chain disruptions to deliver more of its hottest new products to customers.
Here are the other key numbers:
- Adjusted earnings per share: $0.68, up from $0.12 in the second quarter of 2021. Wall Street analysts polled by Refinitiv had expected $0.45, on average.
- Automotive revenue: $37.91 billion, up from $24.13 billion in the second quarter of 2021. Analysts had expected $34.32 billion, on average, according to Refinitiv.
- Net income: $667 million versus $561 million in the second quarter of 2021.
- Adjusted earnings before interest and tax (EBIT) margin: 9.3%, versus 3.9% in the second quarter of 2021
Ford’s shares were up over 6% in after-hours trading after the news was released.
Ford’s U.S. sales were up 1.8% in the second quarter from a year ago, powered by an 8% year-over-year increase in sales of Ford-brand SUVs and crossovers as the company was able to build more of the popular models for its U.S. dealers. That was good news for the company’s profit margins, as those incremental SUV sales largely replaced sales of Ford’s now-discontinued, and less-profitable, car models.
But, the company said, inflation – specifically, higher prices for key commodities and transportation – offset those gains to some extent.
Chief Financial Officer John Lawler said that despite inflation headwinds, Ford is standing by its previous guidance for the full year. It still expects adjusted EBIT of $11.5 billion to $12.5 billion for the year, which would represent 15% to 25% growth from last year, with adjusted free cash flow between $5.5 billion and $6.5 billion.
Lawler said again that Ford is targeting a total company adjusted EBIT margin of 10% – and an 8% EBIT margin from its EVs – by 2026.
Ford said that its shipments in Europe were up about 22% from a year ago, to about 222,000 vehicles, on supply-chain improvements and strong demand for its commercial vehicles. But Ford’s wholesale shipments in China were down 24% in the second quarter, to about 114,000 vehicles, amid extended government-mandated shutdowns near Shanghai and in other parts of eastern China.
Ford is in the midst of a major restructuring, devoting more resources to electric vehicles and trimming $3 billion in annual costs from its internal-combustion development efforts. Starting next year, Ford will report results for three business units: Ford Blue, representing its legacy internal-combustion business; Ford Model e, its electric-vehicle business, and Ford Pro, its commercial vehicle operation.
Ford said last week that it has secured 100% of the battery supplies it will need to deliver electric vehicles at a rate of 600,000 per year by the end of 2023, and that it’s on track to build 2 million a year by 2026.