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 bought within the second quarter, Ford topped rival GM, which bought 21,930 electrical fashions. All Ford EV fashions had double-digit YOY development.
F-150 Lightning gross sales rose 77%, with 7,902 bought. Ford bought 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 bought 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 not too long ago introduced plans to construct extra Tremendous Obligation vans at its EV plant in Ontario.
Ford has mentioned 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 submit Q2 2024 earnings development, it’s not anticipated to be as sturdy as rival GM. In keeping with Earnings Whispers, Ford is anticipated to submit 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. Total 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 primary development 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 keeping with Ford, its Professional enterprise is worthwhile in each area it operates. Ford Professional software program subscriptions have been up 35% within the quarter, whereas cellular restore orders greater than doubled.
Ford’s CEO Jim Farley mentioned it’s widespread for business prospects to undertake new tech, together with linked 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 by 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 12 months. The corporate mentioned 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. Test again for more information from Ford’s Q2 2024 earnings name at 5 PM.
Replace: On the corporate’s earnings name, Farley harassed that Ford is specializing in smaller, extra worthwhile EVs. In keeping with Farley, the primary competitors is Tesla and low-cost rivals from China.
Farley mentioned the one approach 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 lifelike and sharpened” EV plan to drive earnings. Farley mentioned the corporate won’t launch unprofitable EVs as the corporate works towards break even. Ford’s electrical van is already worthwhile, in accordance with Farley.
Farley mentioned Ford’s need to associate on EVs is at an all-time excessive. Though he didn’t provide any particulars, he mentioned to anticipate extra quickly.
Ford is betting on small EVs, software program, and its business enterprise to drive development. Farley famous software program and subscriptions may help preserve development if the economic system turns.