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Ford (F) Beats on Q2 Earnings, Lifts '23 EBIT & FCF Forecast
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Ford (F - Free Report) reported adjusted earnings of 72 cents per share for second-quarter 2023, which beat the Zacks Consensus Estimate of 51 cents and increased from 68 cents recorded in the year-ago quarter. Higher-than-expected automotive revenues resulted in the outperformance. The company’s consolidated second-quarter revenues came in at $44,954 million, rising 11.8% year over year.
The U.S. legacy automaker reports its automotive results under three business segments — Ford Model e, Ford Blue and Ford Pro. While Ford Blue focuses on the firm’s legacy gas-powered business, Ford Model e focuses on EVs, advanced technologies and several related aspects to support electrification plans. Meanwhile, Ford Pro deals with commercial vehicles and services.
In the second quarter, total wholesale volume in the Ford Blue segment increased 7% year over year to 720,000 units, in line with our forecast. Revenues from the segment increased 5% year over year to $25 billion and topped our estimate of $24.06 billion. Earnings before interest and taxes came in at $2,308 million with an EBIT margin of 9.2%. EBIT exceeded our projection of $1,811.6 million, thanks to the company’s cost-containment efforts.
Total wholesale volume in the Ford Model e segment increased 44% year over year to 34,000 units. Revenues from the segment rose 39% year over year to $1.8 billion. Loss before interest and taxes was $1,080 million with an EBIT margin of negative 58.9%. The loss was wider than our estimate of $907.80 amid higher-than-expected costs in the development of technologically advanced products.
Total wholesale volume in the Ford Pro segment increased 8% year over year to 365,000 and topped our expectation of 338,000 units. Revenues from the segment grew 22% year over year to $15.6 billion, crossing our estimate on higher volumes. Earnings before interest and taxes came in at $2,391 million with an EBIT margin of 15.3%.
Overall, Ford’s total automotive revenues came in at around $42,427 million, surpassing our estimate of $37,861 million on stronger-than-expected deliveries in Ford Model e and Ford Pro units.
Second-quarter revenues from the Ford Credit unit came in at $2,527 million, up 12% year over year, and came ahead of our estimate of $2,209 million. Pretax earnings totaled $390 million, falling from $939 million in the year-ago quarter and lagging our estimate of $410 million. Reduced financing margin, the absence of credit loss reserve releases and a decrease in the residual values of leased vehicles adversely impacted the results.
Financial Position
Ford reported adjusted free cash flow (FCF) of $2,919 million during the quarter. It had cash and cash equivalents of $26,406 million as of Jun 30, 2023. Long-term debt, excluding Ford Credit, totaled $19.17 billion at the end of the second quarter of 2023.
2023 Guidance
The company lifted its projection for 2023 adjusted EBIT to the range of $11-$12 billion from $9-$11 billion guided earlier. Adjusted FCF is envisioned in the range of $6.5-$7 billion, higher than the prior forecast of $6 billion. Ford anticipates 2023 EBIT from Ford Blue and Ford Pro to come in at around $8 billion each, up from the previous projection of $7 billion and $6 billion, respectively. Ford Model e is expected to incur a pretax loss of around $4.5 billion this year, wider than the prior expectation of loss of around $3 billion. EBIT from Ford Credit is anticipated at around $1.3 billion.
Key Releases From the Auto Space
Tesla (TSLA - Free Report) reported second-quarter 2023 earnings of 91 cents per share, which rose from the year-ago figure of 76 cents and outpaced the Zacks Consensus Estimate of 83 cents. This marked the 10th consecutive earnings beat for this electric vehicle behemoth. Record deliveries and revenues, which topped expectations, resulted in this outperformance. Total revenues came in at $24,927 million, witnessing year-over-year growth of 47%. The top line exceeded the consensus mark of $24,884 million.
Tesla had cash and cash equivalents of $23,075 million as of Jun 30, 2023 compared with $22,402 million on Mar 31, 2023. Net cash provided by operating activities amounted to $3,065 million in second-quarter 2023. Capital expenditure totaled $2,060 million in the quarter under review.
General Motors (GM - Free Report) reported second-quarter 2023 adjusted earnings of $1.91 per share, which surpassed the Zacks Consensus Estimate of $1.73. The outperformance can be primarily attributed to better-than-expected results from the North America market. The bottom line also rose from the year-ago quarter’s earnings of $1.14 per share. Revenues of $44,746 million beat the Zacks Consensus Estimate of $42,478 million and increased from $35,759 million recorded in the year-ago period.
General Motors had cash and cash equivalents of $23,074 million as of Jun 30, 2023, compared with $19,153 million as of Dec 31, 2022. The long-term automotive debt at the end of the quarter was $15,976 million compared with $15,885 million as of Dec 31, 2022.
AutoNation (AN - Free Report) reported second-quarter 2023 adjusted earnings of $6.29 per share, which decreased 2.9% year over year but topped the Zacks Consensus Estimate of $5.83. This outperformance can be primarily attributed to higher-than-expected new vehicle revenues and profits. In the reported quarter, revenues amounted to $6,890.1 million, surpassing the Zacks Consensus Estimate of $6,645 million. The company had recorded revenues of $6,869.2 million in the second quarter of 2022.
AutoNation’s cash and cash equivalents were $63.7 million as of Jun 30, 2023, declining from $72.6 million recorded as of Dec 31, 2022. The company’s liquidity was $1.4 billion, including $64 million in cash and nearly $1.3 billion available under its revolving credit facility.
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Ford (F) Beats on Q2 Earnings, Lifts '23 EBIT & FCF Forecast
Ford (F - Free Report) reported adjusted earnings of 72 cents per share for second-quarter 2023, which beat the Zacks Consensus Estimate of 51 cents and increased from 68 cents recorded in the year-ago quarter. Higher-than-expected automotive revenues resulted in the outperformance. The company’s consolidated second-quarter revenues came in at $44,954 million, rising 11.8% year over year.
Ford currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ford Motor Company Price, Consensus and EPS Surprise
Ford Motor Company price-consensus-eps-surprise-chart | Ford Motor Company Quote
Segmental Performance
The U.S. legacy automaker reports its automotive results under three business segments — Ford Model e, Ford Blue and Ford Pro. While Ford Blue focuses on the firm’s legacy gas-powered business, Ford Model e focuses on EVs, advanced technologies and several related aspects to support electrification plans. Meanwhile, Ford Pro deals with commercial vehicles and services.
In the second quarter, total wholesale volume in the Ford Blue segment increased 7% year over year to 720,000 units, in line with our forecast. Revenues from the segment increased 5% year over year to $25 billion and topped our estimate of $24.06 billion. Earnings before interest and taxes came in at $2,308 million with an EBIT margin of 9.2%. EBIT exceeded our projection of $1,811.6 million, thanks to the company’s cost-containment efforts.
Total wholesale volume in the Ford Model e segment increased 44% year over year to 34,000 units. Revenues from the segment rose 39% year over year to $1.8 billion. Loss before interest and taxes was $1,080 million with an EBIT margin of negative 58.9%. The loss was wider than our estimate of $907.80 amid higher-than-expected costs in the development of technologically advanced products.
Total wholesale volume in the Ford Pro segment increased 8% year over year to 365,000 and topped our expectation of 338,000 units. Revenues from the segment grew 22% year over year to $15.6 billion, crossing our estimate on higher volumes. Earnings before interest and taxes came in at $2,391 million with an EBIT margin of 15.3%.
Overall, Ford’s total automotive revenues came in at around $42,427 million, surpassing our estimate of $37,861 million on stronger-than-expected deliveries in Ford Model e and Ford Pro units.
Second-quarter revenues from the Ford Credit unit came in at $2,527 million, up 12% year over year, and came ahead of our estimate of $2,209 million. Pretax earnings totaled $390 million, falling from $939 million in the year-ago quarter and lagging our estimate of $410 million. Reduced financing margin, the absence of credit loss reserve releases and a decrease in the residual values of leased vehicles adversely impacted the results.
Financial Position
Ford reported adjusted free cash flow (FCF) of $2,919 million during the quarter. It had cash and cash equivalents of $26,406 million as of Jun 30, 2023. Long-term debt, excluding Ford Credit, totaled $19.17 billion at the end of the second quarter of 2023.
2023 Guidance
The company lifted its projection for 2023 adjusted EBIT to the range of $11-$12 billion from $9-$11 billion guided earlier. Adjusted FCF is envisioned in the range of $6.5-$7 billion, higher than the prior forecast of $6 billion. Ford anticipates 2023 EBIT from Ford Blue and Ford Pro to come in at around $8 billion each, up from the previous projection of $7 billion and $6 billion, respectively. Ford Model e is expected to incur a pretax loss of around $4.5 billion this year, wider than the prior expectation of loss of around $3 billion. EBIT from Ford Credit is anticipated at around $1.3 billion.
Key Releases From the Auto Space
Tesla (TSLA - Free Report) reported second-quarter 2023 earnings of 91 cents per share, which rose from the year-ago figure of 76 cents and outpaced the Zacks Consensus Estimate of 83 cents. This marked the 10th consecutive earnings beat for this electric vehicle behemoth. Record deliveries and revenues, which topped expectations, resulted in this outperformance. Total revenues came in at $24,927 million, witnessing year-over-year growth of 47%. The top line exceeded the consensus mark of $24,884 million.
Tesla had cash and cash equivalents of $23,075 million as of Jun 30, 2023 compared with $22,402 million on Mar 31, 2023. Net cash provided by operating activities amounted to $3,065 million in second-quarter 2023. Capital expenditure totaled $2,060 million in the quarter under review.
General Motors (GM - Free Report) reported second-quarter 2023 adjusted earnings of $1.91 per share, which surpassed the Zacks Consensus Estimate of $1.73. The outperformance can be primarily attributed to better-than-expected results from the North America market. The bottom line also rose from the year-ago quarter’s earnings of $1.14 per share. Revenues of $44,746 million beat the Zacks Consensus Estimate of $42,478 million and increased from $35,759 million recorded in the year-ago period.
General Motors had cash and cash equivalents of $23,074 million as of Jun 30, 2023, compared with $19,153 million as of Dec 31, 2022. The long-term automotive debt at the end of the quarter was $15,976 million compared with $15,885 million as of Dec 31, 2022.
AutoNation (AN - Free Report) reported second-quarter 2023 adjusted earnings of $6.29 per share, which decreased 2.9% year over year but topped the Zacks Consensus Estimate of $5.83. This outperformance can be primarily attributed to higher-than-expected new vehicle revenues and profits. In the reported quarter, revenues amounted to $6,890.1 million, surpassing the Zacks Consensus Estimate of $6,645 million. The company had recorded revenues of $6,869.2 million in the second quarter of 2022.
AutoNation’s cash and cash equivalents were $63.7 million as of Jun 30, 2023, declining from $72.6 million recorded as of Dec 31, 2022. The company’s liquidity was $1.4 billion, including $64 million in cash and nearly $1.3 billion available under its revolving credit facility.