Ford’s Q2 Earnings Disappoint but Forecast Brightens

Written By Michael Gary Scott

On the wings of a mixed earnings report, Ford (F) recently launched its financial scorecard for the second quarter of 2024, revealing adjusted earnings per share of 47 cents – a slump from the prior year’s 72 cents, and a miss against the predicted 64 cents. Despite revenue growth to $47.8 billion, a 6.3% upswing from the previous year, the figures fell short of analysts’ rosy projections.

The Tale of Ford’s Segments

Zooming in on the segmental breakdown, Ford’s Blue segment steered 3% higher in total wholesale volume, reaping 741,000 units. The revenue echoes this climb, rising 7% to $26.7 billion, though earnings before interest and taxes (EBIT) manifested a more conservative growth at $1.71 billion. Ford’s Model e segment, however, rang a more somber tune, a 23% dip in wholesale volume to 26,000 units, and revenues drooping 37% to $1.1 billion. Loss before taxes widened to a hefty $1.14 billion.

Meanwhile, the Ford Pro segment surfed a 3% surge in wholesale volume, backing 375,000 units, albeit falling shy of the expected 408,000 units. Revenue grew by 9% year over year to $17 billion. The financial highlight was an EBIT of $2.56 billion with a stunning margin of 15.1%, surpassing projected figures.

Ford’s overall automotive revenues peaked at $44.8 billion in the second quarter, riding on the prominent performances of Ford Blue and Ford Model e.

Financial Fortitude

The financial snapshot showcased Ford’s adjusted free cash flow hitting $3.2 billion. The automaker boasted $19.95 billion in cash and cash equivalents by Jun 30, 2024, with long-term debt hovering at $18.69 billion, excluding Ford Credit. Ford also declared its regular dividend of 15 cents per share for the third quarter of 2024, payable on Sep 3, 2024.

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Guidance in the Rearview

Although Ford upheld its adjusted EBIT outlook for 2024 at $10-$12 billion, it revised its adjusted free cash flow forecast upwards to $7.5-$8.5 billion, from the initial forecast of $6.5-$7.5 billion. The capital spending estimate was pegged in the range of $8-$9 billion.

Market Outlook & Key Players

Within the vibrant auto landscape, Ford sits at a Zacks Rank #3 (Hold). Notable peers in the arena include Suzuki Motor Corporation (SZKMY), BYD Company Limited (BYDDY), and Honda Motor Co., Ltd. (HMC). SZKMY and BYDDY earned a Zacks Rank #1 (Strong Buy) each, while HMC secured a Zacks Rank #2 (Buy). Investors can explore further stocks via Zacks’ list of top-ranked options.

With various estimates painting a hopeful future, notably SZKMY with a projected earning upturn of 2.09%, BYDDY boasting sales and earnings growth estimates of 21.11% and 9.93% respectively, and HMC on a steadier path with year-over-year growth estimates of 0.73%.