Club holding Ford (F) on Tuesday showed investors it had righted the ship in the first quarter following a dismal end of 2022, easing our concerns that the legacy automaker had lost its way. Automotive revenue for the three months ended March 31 increased about 21% year-over-year, to $39.09 billion, topping analysts’ forecasts of $32.08 billion, according to estimates compiled by Refinitiv. Adjusted earnings-per-share (EPS) grew 66% on an annual basis, to 63 cents, exceeding estimates of 41 cents per share, Refinitiv data showed. Earnings before interest and taxes (EBIT) increased 45% from last year, to $3.38 billion, well ahead of analysts’ predictions for EBIT of $2.5 billion. Bottom Line We are pleased to see Ford quickly bounce back from some of the self-inflected wounds that plagued the fourth quarter of last year, during which the company left about $2 billion of profits on the table. But in the first quarter, management demonstrated an ability to navigate what has become a trickier macroeconomic environment filled with uncertainties ranging from the availability of credit to a potential pricing war with electric-vehicle maker Tesla (TSLA), which has cut prices several times this year. Though, Ford CEO Jim Farley made it clear Tuesday that he would not price his electric vehicles purely to gain market share. He’s focused on a roadmap of profitable growth and taking internal costs down. Ford shares are trading roughly 2% lower in after-hours trading Tuesday, as investors are likely focusing on the lack of a guidance raise and some of the steep losses at the Model e unit. But with execution improving and our patience paid for through the roughly 5% dividend yield, we are sticking by Ford. Quarterly commentary Ford Blue, which represents Ford’s gas-powered and hybrid vehicles, delivered a strong quarter and was profitable in every region in which it operates. Profits nearly doubled to $2.6 billion and margins expanded to 10.4%, a result of higher volumes and a favorable mix of highly profitable vehicles like the F-150. Ford Model e, the electric vehicle division, saw its revenues decline from last year due to lower volumes and shipments, which were down on production interruptions for the Mustang Mach-E and the F-150 Lightning. The Mach-E downtime was scheduled, as part of management’s plan to nearly double manufacturing capacity. However, the F-150 Lightning pickup production issues were unexpected. The company had to address a battery issue, which has since been fixed. The EV division, which management is quick to remind operates like a startup, lost roughly $300 million more in EBIT compared to last year. That was mainly a result of higher engineering costs and commodities prices, along with other inflationary pressures. Despite the challenges in the quarter, profitability is expected to strengthen over time thanks to volume-driven operating leverage, improvements in design and efficiency and lower battery costs. Management continues to believe its first-generation products will be EBIT margin-positive by the end of next year. Ford Pro, the unit that houses the company’s commercial vehicles, as well as its software and services business, saw its EBIT nearly triple. The jump in profitably was supported by higher net pricing, increased volumes and a favorable mix of sales. Management called out a 64% increase in paid-software subscriptions, including higher revenue-per-unit software sales. Subscription software has become a major focus for automakers, as their recurring revenues help decrease the cyclicality of a traditional automotive business. Guidance Ford reaffirmed its outlook for the full-year 2023, expecting total adjusted EBIT to be in the range of $9 billion to $11 billion, while adjusted free cash flow should come in at $6 billion. Ford expects Ford Blue to deliver full year EBIT of about $7 billion, Ford Model e to report a loss of around $3 billion, and Ford Pro’s EBIT to be around $6 billion. Given the size of today’s beats, some investors might be disappointed that Ford did not raise its full-year outlook, especially when compared to General Motors (GM), which raised its full-year guidance last week after a stronger-than-expected quarter. Even so, current full-year 2023 adjusted EBIT and free-cash-flow estimates are $8.18 billion and $2.47 billion, respectively. And with the sell-side analyst estimates so far below management’s range, earnings estimates may move higher this week. Starbucks (SBUX) on Tuesday delivered impressive fiscal second-quarter results, highlighted by positive same-store sales in China for the first time in nearly two years. Despite the coffee giant’s top-and-bottom line beats, its stock tumbled about 6% in extended trading – some of which may be chalked up to the lack of a guidance raise. That may have prompted some investors to lock in profits, given the stock climbed 10% over the past month and 15% year-to-date. We did just that last week after the stock ran to a new 52-week high. Revenue for the the three months ended April 2 rose 14% year-over-year, to $8.72 billion, topping analysts’ estimates of $8.4 billion, according to Refinitiv. Adjusted earnings per share (EPS) climbed 25% on an annual basis, to 74 cents, exceeding analysts’ predictions of 65 cents per share, Refinitiv estimates showed. Bottom line There’s a lot to like about Starbucks’ second-quarter results – namely, the faster-than-expected recovery in China, its second-largest market, since Beijing abandoned its draconian zero-Covid policy late last year. CEO Laxman Narasimhan, who took over the top job in late March, described the quarter as a “significant turning point” for Starbucks’ operations in China, which had been a drag on its overall financials. China’s economic reopening this year is now allowing management to play offense and accelerate its new store openings in the region. Improving operating margins and a 6% annual increase in store traffic are among the other encouraging metrics in the quarter. And remote work hasn’t hurt the business. Starbucks said store traffic in the U.S. has surpassed pre-pandemic levels during the busiest parts of the day. But Starbucks’ decision to merely reaffirm its full-year guidance no doubt left something to be desired with investors. The way the stock traded into Tuesday night’s report – seven consecutive positive sessions from April 21 through Monday – suggested the market had hopes for a beat-and-raise. We can understand the disappointment of investors. At the same time, we recognize there’s continued uncertainty around the economy in the U.S. and elsewhere. Indeed, CFO Rachel Ruggeri said management’s unchanged outlook sought to balance “momentum and optimism” in the business with the broader macro picture. But what actually may be unfolding here is a case where a new CEO at a company is hesitant to raise numbers so early on. The current quarter will be the first full one with Narasimhan as CEO. With expectations now low — and highly achievable — for the second half of the fiscal year, we think a sell-off tomorrow and over the next few days sets investors like us up for an attractive buying opportunity. We maintain a 2 rating on Starbucks stock for now, but expect we may soon be looking to buy shares back. (Jim Cramer’s Charitable Trust is long F, SBUX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.