Ford tops Q1 earnings expectations, sees full-year profit ‘tracking to high-end’ of guidance

Ford (F) reported first-quarter results after the bell that beat expectations on Wednesday, with a changing product game plan at the forefront along with a focus on gasoline and hybrid offerings. Ford also improved some metrics, but not its full-year profit outlook.

For the quarter, Ford reported revenue of $42.8 billion, beating estimates of $40.04 billion and up 3% from a year ago. Ford reported adjusted earnings per share of $0.49, beating forecasts of $0.42, with adjusted EBIT (earnings before interest and taxes) coming in at $2.8 billion, compared to estimates of $2.8 billion. .54 billion dollars. Ford’s results were better than the fourth quarter, when the company was dealing with the lingering effects of the United Auto Workers (UAW) strike.

Ford said full-year adjusted EBIT was in the upper range of $10 billion to $12 billion, although it raised its adjusted free cash flow target from 6.5 billion to 7 .5 billion, with capital spending forecasts tightened to between $8 billion and $9 billion. Previously, Ford forecast adjusted EBIT of $10 billion to $12 billion, adjusted free cash flow of $6 billion to $7 billion, and capital expenditures of $8 billion to $9.5 billion.

Following the earnings release, Ford shares were trading up 3% after hours. The results come after GM reported strong first-quarter results and upgraded its full-year profit outlook.

Ford CEO Jim Farley said during the earnings conference call that a slower ramp of the all-new Ford F-150 was factored into his forecast update. Ford also announced a $0.15 dividend for the quarter.

Last year, Ford divided its operations into three units as part of its Ford+ initiative: Ford Blue, for traditional gasoline-powered automobiles; Ford Model e, for the EV division; and Ford Pro, for its commercial and super-duty truck business. Here is the breakdown for the first quarter:

• Ford Blue: $21.8 billion in revenue, $905 million in EBIT

• Model e: $100 million revenue, $1.32 billion EBIT loss

• Ford Pro: $18 billion in revenue, $3.01 billion in EBIT

“We have to make huge progress on the e model, it’s a huge drag (on profits),” Farley said during the earnings conference call. “(The electric vehicle sector) is the biggest drag on business and industry.”

During the first quarter, Ford deepened its efforts in its gasoline and hybrid vehicles, with spending and production of electric vehicles taking a back seat. Earlier this month, Ford announced that it was pushing back production of electric vehicles at its massive BlueOval City electric vehicle campus in Tennessee to 2026, from its original start date of 2025. Ford also revealed that he is “rescheduling” the launch of upcoming electric vehicles at its Oakville, Ont., plant, where it plans to build next-generation three-row electric vehicles, and most likely a full-size SUV. The company aims to launch these vehicles in 2027, pushing back the original timeline of 2025.

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Ford also announced earlier in the quarter that it would add a third shift to increase production of its Bronco SUV and Ranger midsize pickup to meet customer demand. Meanwhile, Ford is focusing on its hybrid offerings, like the Maverick pickup and the all-new F-150 with hybrid powertrain.

That was reflected in Ford’s first-quarter U.S. deliveries, which jumped 6.8% to 508,083 vehicles, driven by strong sales of electrified products such as hybrids. Ford’s Maverick hybrid pickup truck had its best quarter on record, with sales up 77% in the first quarter. Maverick also propelled overall hybrid sales to a 42% jump, to 38,421, with Ford saying it was also the best quarter for hybrids and that momentum would continue.

“Our hybrid capacity is in trucks, and we don’t see a lot of competition for that sector,” Farley said on the call. Although Toyota and Honda are the main sellers of hybrids in the United States, Farley noted that their offerings include more non-truck offerings.

Even Ford’s electric vehicle offerings – the Mustang Mach-E, Ford Lightning EV and its E-Transit commercial vans – have resisted the recent trend of slowing demand. Ford’s overall electric vehicle portfolio saw a massive 82% increase to 20,223 electric vehicles sold in the first quarter, with the Mustang Mach-E jumping 77.3% to 9,589 units sold and the Lightning pickup seeing its sales increase by 80.4% to 7,743 units. Although sales numbers are strong, Ford has relied on deep discounts, cheap financing rates and leases to move inventory.

“We’ve seen a pretty dramatic decline in electric vehicle prices,” Ford Chief Financial Officer John Lawler said, as Ford struggled to recoup losses in the Model e unit. Lawler said Ford electric vehicle prices fell 17% in the first quarter.

One negative for Ford, however, has been its flagship F-150 sales. Although the F-Series (which includes the F-150 and the heavy-duty F-250 and F-350) retained the crown as the best-selling truck in the United States, sales fell 10.2% over the quarter, at 152,943 units. Ford has seen a slow ramp-up of the all-new F-150, which began sales in March.

Correction: A previous version of this article misstated Ford’s adjusted earnings per share. We regret the error.

Pras Subramanian is a journalist for Yahoo Finance. You can follow it Twitter and on Instagram.

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