Ford Motor Co. increased its full-year guidance by $2 billion in adjusted operating income after the Dearborn automaker on Thursday reported $1.9 billion net income in the second quarter of 2023.
That profit is nearly triple what it was a year ago. Ford increased its full-year guidance for adjusted operating profits to between $11 billion and $12 billion from $9 billion and $11 billion. Additionally, projections of adjusted free cash flow increased to between $6.5 billion and $7 billion from about $6 billion.
But Ford backed tracked on its EV production goals and predicted a greater loss from its EV business than expected. The company says it now expects to lose $4.5 billion from its Ford Model e division after previously saying it would lose $3 billion.
The results were on quarterly revenue of $45 billion, up 12% year-over-year. Ford’s adjusted earnings before interest and taxes increased to $3.8 billion from $3.7 billion a year ago. Adjusted EBIT margins fell to 8.4% from 9.3%.
Ford’s $3.7 billion net income for the first half of the year, up from a loss of $2.4 billion in 2022, puts it below its crosstown rivals. GM on Tuesday reported net income for the first half of 2023 was up 7% year-over-year at $4.9 billion, while it achieved $2.5 billion in the second quarter. Stellantis NV, which only reports earnings semiannually, posted a net profit of $12.1 billion, up 37% year-over-year for the first six months of the year.
The financial results come after executives of the Detroit automakers started bargaining earlier this month with the United Auto Workers for a new contract. Their current contracts are set to expire Sept. 14, and UAW leaders are seeking to recoup benefits lost during the Great Recession and bankruptcies such as cost-of-living allowances, eliminate wage tiers and secure jobs in the electrification transition.
Its EV business, Ford Model e, posted a $1.08 billion operating loss on revenue of $1.8 billion for the quarter. The Blue Oval previously disclosed it expects to lose $3 billion on EVs this year after losing $2.1 billion last year — losses that are expected to balloon this year to $4.5 billion, the company said.
As part of its $50 billion electrification plan, Ford is targeting an 8% operating profit margin for its EV business by the end of 2026, by which time it aims to hit a global production rate of 2 million EVs annually and a 10% adjusted operating profit margin for the company as a whole.
“The shift to powerful digital experiences and breakthrough EVs is underway and going to bevolatile, so being able to guide customers through and adapt to the pace of adoption are bigadvantages for us,” Ford CEO Jim Farley said in a statement. “Ford+ is making us more resilient, efficient andprofitable.”
Toward those goals, Ford decreased the price on its F-150 Lightning pickup truck earlier this month as it finished plant upgrades at its Rouge Electric Vehicle Center in Dearborn for increased capacity and battery material costs decreased.
The lowest-price Pro model’s suggested retail price fell to $49,995 from $59,974, though its remains above the $39,974 price at which it launched in April 2022 following a few price hikes. The Lariat 510A model’s price declined to $69,995 from $76,974.
Operating profits for Ford Pro, its commercial products and services unit, nearly tripled from a year ago to $2.39 billion on revenue of $15.6 billion. Ford expects its operating profits to be nearly $6 billion in 2023.
The operating profits from Ford Blue, the automaker’s hybrid and fossil fuel-powered business, was $2.31 billion on revenue of $25 billion after the segment lost money last year. The company says it will contribute $7 billion in operating profits this year.
afifelski@detroitnews.com