- Ford reports second-quarter revenue of $47.8 billion, net income of $1.8 billion and adjusted EBIT of $2.8 billion
- Ford Pro posts quarterly EBIT of $2.6 billion – a 15% margin – on 9% revenue gain; customers buying every Super Duty truck and Transit van the company can make
- Ford Blue hybrid sales up 34%, represent nearly 9% of company’s global vehicle mix;
Ford Model e costs down ~$400 million - Expectations for full-year 2024 adjusted EBIT unchanged at $10 billion to $12 billion; adjusted free cash flow outlook raised $1 billion, to between $7.5 billion and $8.5 billion
DEARBORN, Mich., July 24, 2024 – Customers exercising “freedom of choice” made Ford the No. 1 gas, No. 2 electric and No. 3 hybrid vehicle brand in the U.S. and the company remains confident in full-year 2024 results, including increasing effectiveness generating cash.
President and CEO Jim Farley said those are second-quarter outcomes resulting from further execution of the customer-centered Ford+ plan – with disciplined capital allocation setting the table for profitable long-term growth by a more strategically and financially durable company.
“Ford+ is on track, our underlying quality is improving, and Ford Pro is showing the huge upside we’ve got in all our businesses,” Farley said. “Transparency and accountability from having separate teams focused on the needs of different customers are leading to better decisions and greater value for everyone.”
Company Key Metrics Summary
Ford’s second-quarter revenue was $47.8 billion, up 6% year-over-year on a slight increase in wholesales. Benefits of a persistently fresh lineup of vehicles included momentum from the all-new F-150 pickup and record volumes of Transit commercial vans.
Company net income was $1.8 billion and adjusted earnings before interest and taxes, or EBIT, was $2.8 billion. Profitability was affected by an increase in warranty reserves, though efforts to lift the quality of new products are starting to pay off, with positive implications for customer satisfaction and Ford’s operating performance.
J.D. Power last month reported that Ford jumped 14 spots to No. 9 in the analytics company’s 2024 U.S. Initial Quality Study. Bronco Sport was named the best small SUV for initial quality; Ford’s Lincoln luxury brand was recognized for enhanced performance.
“Our own evaluations are showing similar quality gains,” said Ford Vice Chair and CFO John Lawler, “with declines in the number of incidents during the critical first three months in service, what the industry calls ‘3MIS.’”
Product launch and 3MIS data are leading indicators of future warranty costs, with today’s quality improvements typically showing up in financial results down the road.
“We still have lots of work ahead of us to raise quality and reduce costs and complexity, but the team is committed and we’re heading in the right direction,” said Lawler.
Operating cash flow in the second quarter was $5.5 billion and adjusted free cash flow was $3.2 billion. At quarter-end, Ford’s continually strong balance sheet had close to $27 billion in cash and about $45 billion in liquidity – supporting disciplined allocation of capital to invest in both long-term growth and returns to shareholders.
The company today declared a third-quarter regular dividend of 15 cents per share, payable Sept. 3 to shareholders of record at the close of business on Aug. 7.
Ford Pro’s second-quarter EBIT was $2.6 billion, an increase of 7% and a margin of 15%. Segment revenue was $17.0 billion, up 9% – three times the rate of growth in product shipments during the period.
Demand by commercial customers for Super Duty trucks and Transit commercial vans is outstripping production capacity. The ever-growing popularity of Super Duty and its strategic importance to Ford prompted the decision announced last week to add a third North America assembly plant to assemble the trucks.
Beginning in 2026, the company’s Oakville Assembly Complex in Ontario, Canada, will initially add capacity of up to 100,000 Super Duty trucks – and, in the future, a version with multi-energy technology – to volumes already being “Built Ford Tough” at the Kentucky Truck and Ohio Assembly plants.
Subscriptions to Ford Pro software were up 35% in the quarter and mobile repair orders fulfilled by the company’s fleet of about 2,000 service vehicles – and counting – more than doubled.
Business Segment Highlights
Farley said it’s common for commercial customers to adopt new technologies of all types – like connected, increasingly electric vehicles today – before individual consumers. Accordingly, advantages to customers and the company from the customer-focused segments defined by Ford+ are accruing first in that space.
“The capabilities we’re developing in electric vehicles and software-enabled and physical services are wide competitive moats between Ford Pro and other companies,” said Farley. “For customers, from small businesses to the largest enterprises, they’re bridges to transforming their organizations at the same time we’re remaking ours.
“Over time, we’ll build out those same kinds of benefits for Ford Blue and Ford Model e customers and further distinguish us from other automakers, traditional and new ones.”
Second-quarter wholesales and revenue for Ford Blue were up 3% and 7%, respectively, the latter to $26.7 billion. Truck volumes grew and overall pricing was strong. EBIT of $1.2 billion was down from the year-ago quarter, mostly because of the higher warranty costs.
Sales of hybrid vehicles increased 34% and accounted for nearly 9% of all Ford vehicles worldwide. That’s two full points higher than in second-quarter 2023 with more hybrid models of the company’s most popular products on the way.
Ford Model e had an EBIT loss of $1.1 billion amid ongoing industrywide pricing pressure on first-generation electric vehicles and lower wholesales. Those factors more than offset about $400 million in year-over-year cost reductions in the segment. Ford Credit had second-quarter earnings before taxes of $343 million.
Full-Year 2024 Outlook
With Ford+, Lawler said, the company is laying a foundation for profitable, long-term growth and, in the meantime, is on course for a solid full-year 2024 operating performance. Ford’s guidance range for adjusted EBIT remains $10 billion to $12 billion and expectations for adjusted FCF have been raised by $1 billion to between $7.5 billion and $8.5 billion.
Capital expenditures for the year are still anticipated to be between $8.0 billion and $9.0 billion, with an enterprise-wide objective for the lower end of the range.
Outlooks for full-year EBIT are up for Ford Pro, to $9.0 billion to $10.0 billion, on further growth and favorable product mix, and down for Ford Blue, to $6.0 billion to $6.5 billion, reflecting higher warranty costs than originally planned.
An anticipated full-year loss of $5.0 billion to $5.5 billion for Ford Model e is unchanged, with continued pricing pressure and investments in next-generation electric vehicles. Earnings before taxes from Ford Credit are expected to be about $1.5 billion, which would be a double-digit percentage increase from 2023.
Ford plans to report third-quarter 2024 financial results following the close of market on Monday, Oct. 28.
Conference Call Details
Ford Motor Company (NYSE: F) and Ford Motor Credit Company released their second-quarter 2024 financial results at 4:05 p.m. ET on Wednesday, July 24. Following the release, at 5:00 p.m. ET, Jim Farley, Ford president and chief executive officer; John Lawler, Ford vice chair and chief financial officer; and other members of the Ford senior leadership team will host a conference call to discuss the results in the context of the company’s ambitious Ford+ plan for growth and value creation. The presentation and supporting materials will be available at shareholder.ford.com. Representatives of the investment community will be able to ask questions on the call.
Ford Second-Quarter Earnings Call: Wednesday, July 24, at 5:00 p.m. ET
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The following applies to the information throughout this release:
- See tables later in this release for the nature and amount of special items, and reconciliations of the non-GAAP financial measures designated as “adjusted” to the most comparable financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”).
- Wholesale unit and production volumes include Ford and Lincoln brand vehicles produced and sold by Ford or our unconsolidated affiliates and Jiangling Motors Corporation (“JMC”) brand vehicles produced and sold in China by our unconsolidated affiliate. Revenue does not include vehicles produced and sold by our unconsolidated affiliates. Wholesales and revenue exclude transactions between the Ford Blue, Ford Model e and Ford Pro business segments. See materials supporting the July 24, 2024, conference call at shareholder.ford.com for further discussion of wholesale unit volumes.
Cautionary Note on Forward-Looking Statements
Statements included or incorporated by reference herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by our management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation:
- Ford is highly dependent on its suppliers to deliver components in accordance with Ford’s production schedule and specifications, and a shortage of or inability to acquire key components or raw materials, such as lithium, cobalt, nickel, graphite, and manganese, can disrupt Ford’s production of vehicles;
- To facilitate access to the raw materials and other components necessary for the production of electric vehicles, Ford has entered into and may, in the future, enter into multi-year commitments to raw material and other suppliers that subject Ford to risks associated with lower future demand for such items as well as costs that fluctuate and are difficult to accurately forecast;
- Ford’s long-term competitiveness depends on the successful execution of Ford+;
- Ford’s vehicles could be affected by defects that result in recall campaigns, increased warranty costs, or delays in new model launches, and the time it takes to improve the quality of our vehicles and services could continue to have an adverse effect on our business;
- Ford may not realize the anticipated benefits of existing or pending strategic alliances, joint ventures, acquisitions, divestitures, or business strategies;
- Ford may not realize the anticipated benefits of restructuring actions and such actions may cause Ford to incur significant charges, disrupt our operations, or harm our reputation;
- Operational information systems, security systems, vehicles, and services could be affected by cybersecurity incidents, ransomware attacks, and other disruptions and impact Ford and Ford Credit as well as their suppliers and dealers;
- Ford’s production, as well as Ford’s suppliers’ production, and/or the ability to deliver products to consumers could be disrupted by labor issues, public health issues, natural or man-made disasters, adverse effects of climate change, financial distress, production difficulties, capacity limitations, or other factors;
- Failure to develop and deploy secure digital services that appeal to customers could have a negative impact on Ford’s business;
- Ford’s ability to maintain a competitive cost structure could be affected by labor or other constraints;
- Ford’s ability to attract, develop, grow, and reward talent is critical to its success and competitiveness;
- Ford’s new and existing products and digital, software, and physical services are subject to market acceptance and face significant competition from existing and new entrants in the automotive and digital and software services industries, and its reputation may be harmed if it is unable to achieve the initiatives it has announced;
- Ford’s results are dependent on sales of larger, more profitable vehicles, particularly in the United States;
- With a global footprint and supply chain, Ford’s results and operations could be adversely affected by economic or geopolitical developments, including protectionist trade policies such as tariffs, or other events;
- Industry sales volume can be volatile and could decline if there is a financial crisis, recession, public health emergency, or significant geopolitical event;
- Ford may face increased price competition or a reduction in demand for its products resulting from industry excess capacity, currency fluctuations, competitive actions, or other factors, particularly for electric vehicles;
- Inflationary pressure and fluctuations in commodity and energy prices, foreign currency exchange rates, interest rates, and market value of Ford or Ford Credit’s investments, including marketable securities, can have a significant effect on results;
- Ford and Ford Credit’s access to debt, securitization, or derivative markets around the world at competitive rates or in sufficient amounts could be affected by credit rating downgrades, market volatility, market disruption, regulatory requirements, or other factors;
- The impact of government incentives on Ford’s business could be significant, and Ford’s receipt of government incentives could be subject to reduction, termination, or clawback;
- Ford Credit could experience higher-than-expected credit losses, lower-than-anticipated residual values, or higher-than-expected return volumes for leased vehicles;
- Economic and demographic experience for pension and OPEB plans (e.g., discount rates or investment returns) could be worse than Ford has assumed;
- Pension and other postretirement liabilities could adversely affect Ford’s liquidity and financial condition;
- Ford and Ford Credit could experience unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, services, perceived environmental impacts, or otherwise;
- Ford may need to substantially modify its product plans and facilities to comply with safety, emissions, fuel economy, autonomous driving technology, environmental, and other regulations;
- Ford and Ford Credit could be affected by the continued development of more stringent privacy, data use, data protection, and artificial intelligence laws and regulations as well as consumers’ heightened expectations to safeguard their personal information; and
- Ford Credit could be subject to new or increased credit regulations, consumer protection regulations, or other regulations.
We cannot be certain that any expectation, forecast, or assumption made in preparing forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events, or otherwise. For additional discussion, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.