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Ford (F) Q4 Earnings Miss Estimates, Dividend Reinstated
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Ford (F - Free Report) reported adjusted earnings of 26 cents per share for fourth-quarter 2021, missing the Zacks Consensus Estimate of 43 cents. Lower-than-expected profits in North America and a pretax loss in Europe led to this underperformance. The bottom line, moreover, compares unfavorably with the year-ago quarter’s earnings of 34 cents. Nonetheless, the company’s consolidated fourth-quarter revenues came in at $37.7 billion, up 4.7% year over year.
During the fourth quarter, after suspending the payments for more than a year and a half on account of the coronavirus pandemic, Ford reinstated a regular dividend of 10 cents per share.
Ford Motor Company Price, Consensus and EPS Surprise
For the fourth quarter, the total wholesale volume in the Ford Automotive segment dropped 11% year over year to 1,104,000 units but surpassed the consensus mark of 1,093,000 units. Revenues of the segment rose 6% year over year to $35,300 million and marginally outpaced the Zacks Consensus estimate of $35,018 million. Earnings before interest and taxes came in at $1,641 million, higher than the year-ago earnings of $1,260 million.
In North America, revenues rose 17% year on year to $25.8 billion in the reported quarter. The metric marginally surpassed the Zacks Consensus Estimate of $25.7 billion. The wholesale volume surged 11% from the year-earlier quarter to 599,000 units, beating the consensus mark of 567,000 units. EBIT totaled $1,822 million, higher than the earnings of $1,083 million in the corresponding quarter of 2020 but lagging the consensus metric of $2,158 million.
In South America, revenues moved down 8% year over year to $0.8 billion for the fourth quarter but topped the consensus mark of $0.68 billion. Wholesale volume plunged 59% from the year-ago quarter to 26,000 units and missed the consensus mark of 27,760 units. The unit’s pretax earnings improved to $36 million, turning around from the loss of $105 million reported in the prior-year quarter amid cost-cut and rejig efforts. Reported EBIT also compared favorably with the consensus mark of a loss of $8.26 million.
In Europe, revenues dropped 19% year on year to $5.7 billion for the December-end quarter and lagged the consensus mark of $6.1 billion. Wholesale volume slid 37% year over year to 213,000 units and missed the consensus mark of 233,000 units. Pretax loss for the segment totaled $159 million, compared to a year-ago profit of $409 million. The reported loss also compares unfavorably with the consensus mark of profit of $7.51 million.
In China, revenues plummeted 27% year over year to $0.6 billion for the reported quarter. Wholesale volume dipped 8% from the prior-year figure to 186,000 units. Moreover, the pretax loss widened from the prior year’s $65 million to $150 million.
In the International Markets Group, revenues were down 7% from the year-ago figure to $2.4 billion. Wholesale volume slid 15% from the prior-year level to 80,000 units and pretax earnings totaled $92 million, turning around from the loss of $62 million reported in the year-ago period.
Fourth-quarter revenues from the Ford Credit unit came in at $2,373 million, lower than the year-ago revenues of $2,723 million and missing the Zacks Consensus Estimate of $2,708 million. Pretax earnings totaled $1,055 million, beating the consensus mark of $700 million.
Revenues from Ford Mobility came in at $48 million, surging from the year-earlier level of $12 million.
Financial Position
Ford reported adjusted free cash flow (FCF) of $2,335 million during the quarter, higher than the prior-year quarter’s FCF of $1,873 million. It had cash and cash equivalents of $20,540 million as of Dec 31, 2021, compared with $25,243 million on Dec 31, 2020. The automotive long-term debt decreased to $17,200 million on Dec 31, 2021 from $22,633 million as of the end of 2020.
Guidance
Ford anticipates adjusted EBIT for 2022 between $11.5 billion and $12.5 billion, implying an uptick of 15-25% from the 2021 level. Moreover, 2022 vehicle wholesale volumes are anticipated to jump 10% to 15%, with a high single- to a low double-digit decline in the first quarter, owing to the semiconductor crunch. Meanwhile, adjusted FCF is envisioned in the range of $5.5-6.5 billion for 2022, suggesting a jump from $4.6 billion recorded in 2021. The company expects to achieve a global production capacity of iconic, high-volume battery electric vehicles of at least 600,000 by 2023.
Tesla has an expected earnings growth rate of 37.6% for 2022. The Zacks Consensus Estimate for its 2022 earnings has been revised upward by $1.41 in the past 30 days.
Tesla’s earnings beat the Zacks Consensus Estimate in the last four quarters, delivering an earnings surprise of 33.3%, on average. TSLA has risen 4.8% in the past year.
Genuine Parts has an expected earnings growth rate of 10.6% for 2022. The Zacks Consensus Estimate for its 2022 earnings has been revised 11 cents upward in the past 30 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in the last four quarters, delivering an earnings surprise of 15.9%, on average. GPC has surged 32.2% in the past year.
Standard Motor has an expected earnings growth rate of 5.6% for 2022. The Zacks Consensus Estimate for its 2022 earnings has been revised a penny upward in the past 60 days.
Standard Motor’s earnings beat the Zacks Consensus Estimate in the last four quarters, delivering an earnings surprise of 67.3%, on average. SMP has rallied 10.2% in the past year.
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Ford (F) Q4 Earnings Miss Estimates, Dividend Reinstated
Ford (F - Free Report) reported adjusted earnings of 26 cents per share for fourth-quarter 2021, missing the Zacks Consensus Estimate of 43 cents. Lower-than-expected profits in North America and a pretax loss in Europe led to this underperformance. The bottom line, moreover, compares unfavorably with the year-ago quarter’s earnings of 34 cents. Nonetheless, the company’s consolidated fourth-quarter revenues came in at $37.7 billion, up 4.7% year over year.
During the fourth quarter, after suspending the payments for more than a year and a half on account of the coronavirus pandemic, Ford reinstated a regular dividend of 10 cents per share.
Ford Motor Company Price, Consensus and EPS Surprise
Ford Motor Company price-consensus-eps-surprise-chart | Ford Motor Company Quote
Segmental Performance
For the fourth quarter, the total wholesale volume in the Ford Automotive segment dropped 11% year over year to 1,104,000 units but surpassed the consensus mark of 1,093,000 units. Revenues of the segment rose 6% year over year to $35,300 million and marginally outpaced the Zacks Consensus estimate of $35,018 million. Earnings before interest and taxes came in at $1,641 million, higher than the year-ago earnings of $1,260 million.
In North America, revenues rose 17% year on year to $25.8 billion in the reported quarter. The metric marginally surpassed the Zacks Consensus Estimate of $25.7 billion. The wholesale volume surged 11% from the year-earlier quarter to 599,000 units, beating the consensus mark of 567,000 units. EBIT totaled $1,822 million, higher than the earnings of $1,083 million in the corresponding quarter of 2020 but lagging the consensus metric of $2,158 million.
In South America, revenues moved down 8% year over year to $0.8 billion for the fourth quarter but topped the consensus mark of $0.68 billion. Wholesale volume plunged 59% from the year-ago quarter to 26,000 units and missed the consensus mark of 27,760 units. The unit’s pretax earnings improved to $36 million, turning around from the loss of $105 million reported in the prior-year quarter amid cost-cut and rejig efforts. Reported EBIT also compared favorably with the consensus mark of a loss of $8.26 million.
In Europe, revenues dropped 19% year on year to $5.7 billion for the December-end quarter and lagged the consensus mark of $6.1 billion. Wholesale volume slid 37% year over year to 213,000 units and missed the consensus mark of 233,000 units. Pretax loss for the segment totaled $159 million, compared to a year-ago profit of $409 million. The reported loss also compares unfavorably with the consensus mark of profit of $7.51 million.
In China, revenues plummeted 27% year over year to $0.6 billion for the reported quarter. Wholesale volume dipped 8% from the prior-year figure to 186,000 units. Moreover, the pretax loss widened from the prior year’s $65 million to $150 million.
In the International Markets Group, revenues were down 7% from the year-ago figure to $2.4 billion. Wholesale volume slid 15% from the prior-year level to 80,000 units and pretax earnings totaled $92 million, turning around from the loss of $62 million reported in the year-ago period.
Fourth-quarter revenues from the Ford Credit unit came in at $2,373 million, lower than the year-ago revenues of $2,723 million and missing the Zacks Consensus Estimate of $2,708 million. Pretax earnings totaled $1,055 million, beating the consensus mark of $700 million.
Revenues from Ford Mobility came in at $48 million, surging from the year-earlier level of $12 million.
Financial Position
Ford reported adjusted free cash flow (FCF) of $2,335 million during the quarter, higher than the prior-year quarter’s FCF of $1,873 million. It had cash and cash equivalents of $20,540 million as of Dec 31, 2021, compared with $25,243 million on Dec 31, 2020. The automotive long-term debt decreased to $17,200 million on Dec 31, 2021 from $22,633 million as of the end of 2020.
Guidance
Ford anticipates adjusted EBIT for 2022 between $11.5 billion and $12.5 billion, implying an uptick of 15-25% from the 2021 level. Moreover, 2022 vehicle wholesale volumes are anticipated to jump 10% to 15%, with a high single- to a low double-digit decline in the first quarter, owing to the semiconductor crunch. Meanwhile, adjusted FCF is envisioned in the range of $5.5-6.5 billion for 2022, suggesting a jump from $4.6 billion recorded in 2021. The company expects to achieve a global production capacity of iconic, high-volume battery electric vehicles of at least 600,000 by 2023.
Key Picks
Ford currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Tesla (TSLA - Free Report) , Genuine Parts (GPC - Free Report) and Standard Motor (SMP - Free Report) . While Tesla flaunts a Zacks Rank of 1 (Strong Buy), Genuine Parts and Standard Motor carry a Zacks Rank of 2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesla has an expected earnings growth rate of 37.6% for 2022. The Zacks Consensus Estimate for its 2022 earnings has been revised upward by $1.41 in the past 30 days.
Tesla’s earnings beat the Zacks Consensus Estimate in the last four quarters, delivering an earnings surprise of 33.3%, on average. TSLA has risen 4.8% in the past year.
Genuine Parts has an expected earnings growth rate of 10.6% for 2022. The Zacks Consensus Estimate for its 2022 earnings has been revised 11 cents upward in the past 30 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in the last four quarters, delivering an earnings surprise of 15.9%, on average. GPC has surged 32.2% in the past year.
Standard Motor has an expected earnings growth rate of 5.6% for 2022. The Zacks Consensus Estimate for its 2022 earnings has been revised a penny upward in the past 60 days.
Standard Motor’s earnings beat the Zacks Consensus Estimate in the last four quarters, delivering an earnings surprise of 67.3%, on average. SMP has rallied 10.2% in the past year.