Ford Revises Full-Year Earnings Forecast to Lower Bound
Ford Motor Company (NYSE:F) on Monday exceeded Wall Street's third-quarter earnings expectations but softened its full-year earnings outlook, expecting to reach only the lower bound of the previously stated range. The automaker reduced its earnings before interest and taxes forecast for the current year from an initial range of $10 billion to $12 billion to approximately $10 billion.
The company reported a net income of $900 million in the third quarter, equating to 22 cents per share. This figure includes a significant $1 billion charge resulting from the cancellation of a three-row electric SUV production in August. Following the announcement, Ford's shares fell by 3% in after-hours trading.
On an adjusted basis, the automaker's third-quarter profit reached 49 cents per share, slightly above the average analyst estimate of 47 cents compiled by LSEG.
Ford's CEO Jim Farley noted that the company faced challenges in its electric vehicle (EV) segment given the intensified competition from industry leaders like Tesla (NASDAQ:TSLA) and various Chinese manufacturers. The decision to cancel the three-row EV, described by Ford as a "personal lead train," was based on the conclusion that the vehicle would not be profitable within the necessary timeframe.
Executives at Ford emphasized that the company’s battery-powered vehicle operations must achieve profitability within the first 12 months following the launch of new vehicles to ensure sustainability.
Amid these developments, Ford's stock has declined by 6% this year, which is less severe than the 40% drop experienced by Jeep manufacturer Stellantis (NYSE:STLA). Stellantis is grappling with slowing sales and profits in North America and has recently undergone management changes.
In contrast, General Motors (NYSE:GM) has emerged as the strongest performer among the Big Three automakers this year, with its share value increasing by approximately 47%. General Motors has consistently raised its guidance and surpassed Wall Street's expectations with its third-quarter results announced last week.