Ford ( F Quick Quote F - Free Report) managed to deliver a comprehensive beat in the first quarter of 2021. In fact, this marked the fourth straight earnings beat for the firm. However, shares of the U.S. auto giant fell more than 3% in after-hours trading yesterday, as investors were discouraged by the company’s downbeat guidance amid global chip crunch concerns. Earnings & Revenue Snapshot
Ford posted first-quarter 2021 adjusted earnings of 89 cents per share, breezing past the Zacks Consensus Estimate of 16 cents and turning around from the year-ago loss of 23 cents. Higher-than-expected revenues, primarily in Europe and North America markets, led to the outperformance. Its consolidated fourth-quarter revenues came in at $36.2 billion, up 5.5% year over year. Importantly, the company generated automotive revenues of $33.5 billion, which outpaced the Zacks Consensus Estimate of $31.1 billion.
For the first quarter, total wholesale volume in the
Ford Automotive segment slid from the prior-year period to 1,062,000 units. However, revenues of the segment rose 5.5% year over year to $33.6 billion., Automotive earnings before interest and taxes (EBIT) of $3.4 billion turned around from the loss of $177 million incurred in the corresponding quarter of 2020, backed by the firm’s restructuring efforts and massive business improvement, primarily in Europe and North America.
, revenues edged up 5% year on year to $23 billion for the reported quarter, aided by strong demand for Mustang Mach-E, 2021 F-150 and Bronco Sport models. The metric also surpassed the Zacks Consensus Estimate of $20.9 billion. While wholesale volume contracted 14% from the year-earlier quarter to 533,000 units, EBIT skyrocketed 752% to $2,949 million, thanks to favorable pricing strategy and product mix. North America
, revenues plummeted 40% year over year to $0.4 billion for the fourth quarter. Wholesale volume dwindled 70% from the year-ago quarter to 18,000 units. However, the unit’s pretax loss narrowed from $113 million in the prior-year quarter to $73 million. Cost cut and rejig efforts helped it counter weak industry demand and economic uncertainties. South America
, revenues grew 13% year on year to $7.1 billion for the March-end quarter, topping the consensus mark of $6.7 billion. While wholesale volumes tapered off 4% year over year to 278,000 units, EBIT totaled $341 million, reversing the year-ago loss of $143 million, thanks to aggressive restructuring initiatives. During the quarter under review, Ford commenced shipments of Mustang Mach-E in Europe and announced plans to invest $1 billion to establish the Ford Cologne Electrification Center to rev up e-mobility goals. Europe
, revenues soared 39% year over year to $0.8 billion for the reported quarter. Wholesale volume climbed 85% from the prior-year figure to 150,000 units and pretax loss narrowed from $241 million to $15 million for the quarter under review. China
, revenues scaled up 15% from the year-ago figure to $2.3 billion. Wholesale volume increased 5% from the prior-year level to 82,000 units and pretax earnings totaled $201 million against $26 million loss incurred in the comparable year-ago period. In fact, International Markets Group achieved its highest pretax profit ever, thanks to low structural costs. International Markets Group
First-quarter revenues from the
Ford Credit unit declined 10.2% year over year to $2,663 million. Revenues from Ford Mobility came in at $11 million, on par with first-quarter 2020. Financial Position
The Zacks Rank #3 (Hold) company recorded negative adjusted free cash flow free cash flow (FCF) of $396 million. Ford had cash and cash equivalents of $21,826 million as of Mar 31, 2020 compared with $25,243 million on Dec 31, 2020. Automotive long-term debt increased to $24,819 million on Mar 31, 2021 from $22,633 million in the corresponding period of 2020. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Ford Hit Hard By Chip Crunch
In early February, Ford — which shares space with
General Motors ( GM Quick Quote GM - Free Report) , Tesla ( TSLA Quick Quote TSLA - Free Report) and Volkswagen ( VWAGY Quick Quote VWAGY - Free Report) — already warned that semiconductor shortages will adversely impact the firm’s 2021 adjusted EBIT, which is forecast in the range of $1-2.5 billion. Fire breakout at a Renesas Electronics chip plant in March only exacerbated the chip famine. Amid the acute chip shortage, Ford lowered its guidance and expects a $2.5 billion hit to earnings. Consequently, it now anticipates full-year 2021 adjusted EBIT in the band of $5.5-$6.5 billion. Guidance for adjusted FCF is also cut and is currently envisioned in the range of $500-$1.5 billion versus the prior forecast of $3.5-4.5 billion.
The company has warned that the microchip shortfall would slash second-quarter output by 50%. Ford now anticipates losing 1.1 million units of production in 2021 due to chip concerns. What’s worse, it expects the global chip shortage issue to persist till 2022.
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