Ford Q2 2023 Earnings Report

[rperez817]

Ford Pro, Ford Blue Drive Solid Second-Quarter Results; Company Raises Expectations for Full-Year 2023 Profitability | Ford Media Center

 

Highlights.

• Revenue increases 12% year-over-year to $45 billion; net income ($1.9 billion) and adjusted EBIT ($3.8 billion) also higher; cash and liquidity persistently strong
• Appeal of Ford Pro to commercial customers produces 22% revenue growth; EBIT more than doubles to $2.4 billion, a 15% margin; software, repair services sales up
• Ford Blue gas and hybrid business posts higher wholesales and revenue, reports $2.3 billion in EBIT; all-new global Ranger pickup even more popular, profitable
• Ford Model e revenue up 39%; scaling, competitive pricing further establishing leadership ahead of industry’s next-generation EVs; now expecting to reach 600K run rate in 2024
• Company raises full-year 2023 guidance for adjusted EBIT to between $11 billion and $12 billion, and for adjusted free cash flow to between $6.5 billion and $7 billion

 

 

[Oac98]

2 hours ago, rperez817 said:

Ford Pro, Ford Blue Drive Solid Second-Quarter Results; Company Raises Expectations for Full-Year 2023 Profitability | Ford Media Center

 

Highlights.

• Revenue increases 12% year-over-year to $45 billion; net income ($1.9 billion) and adjusted EBIT ($3.8 billion) also higher; cash and liquidity persistently strong
• Appeal of Ford Pro to commercial customers produces 22% revenue growth; EBIT more than doubles to $2.4 billion, a 15% margin; software, repair services sales up
• Ford Blue gas and hybrid business posts higher wholesales and revenue, reports $2.3 billion in EBIT; all-new global Ranger pickup even more popular, profitable
• Ford Model e revenue up 39%; scaling, competitive pricing further establishing leadership ahead of industry’s next-generation EVs; now expecting to reach 600K run rate in 2024
• Company raises full-year 2023 guidance for adjusted EBIT to between $11 billion and $12 billion, and for adjusted free cash flow to between $6.5 billion and $7 billion

 

 

I hope some of that gets shared in the form of gains for the UAW and Unifor membership

[akirby]

59 minutes ago, Oacjay98 said:

I hope some of that gets shared in the form of gains for the UAW and Unifor membership

Don’t you guys have profit sharing?

[akirby]

I see they pushed the Model E 600k run rate to 2024.

[CurtisH]

11 minutes ago, akirby said:

I see they pushed the Model E 600k run rate to 2024.

Yeah, I noticed that too. 

[rperez817]

1 hour ago, akirby said:

I see they pushed the Model E 600k run rate to 2024.

 

57 minutes ago, CurtisH said:

Yeah, I noticed that too. 

 

Jim Farley added that despite moving the 600,000 run rate goal for BEV a year later, Ford "will maintain flexibility, balancing growth and profitability, on the way to attaining a two-million run rate" for BEV. 

 

Hopefully Ford achieves the 2M run rate for BEV around mid-decade (2025 or 2026).

[akirby]

9.8% and 13% margins for Blue and Pro are pretty good.  I wonder what warranty costs look like.

[akirby]

7 hours ago, rperez817 said:

Jim Farley added that despite moving the 600,000 run rate goal for BEV a year later,

They did not move it a year later at this point.  They said sometime in 2024.  Could be 1Q, 2Q or 3Q.

[rperez817]

1 hour ago, akirby said:

I wonder what warranty costs look like.

Warranty costs were up by $500M in the first half of 2023.

 

1 hour ago, akirby said:

They did not move it a year later at this point.  They said sometime in 2024.  Could be 1Q, 2Q or 3Q.

Thanks for the correction. Hopefully it's 1Q 2024!

Edited July 28, 2023 by rperez817

[Oac98]

15 hours ago, akirby said:

Don’t you guys have profit sharing?

We absolutely DO NOT have profit sharing lol. Lots of people at work want Unifor to consider it. Lots of angry people at work the union wants to do the contract ratification online via zoom and not in person. I guess they don’t want the hooligans in Oakville to boo and heckle like we did in 2016. When covid hit they dodged the bullet, online ratification all peaceful and quiet. Profit sharing has been a big issue amongst the workforce many many people want it. 

Edited July 28, 2023 by Oacjay98

[akirby]

46 minutes ago, Oacjay98 said:

We absolutely DO NOT have profit sharing lol. Lots of people at work want Unifor to consider it. Lots of angry people at work the union wants to do the contract ratification online via zoom and not in person. I guess they don’t want the hooligans in Oakville to boo and heckle like we did in 2016. When covid hit they dodged the bullet, online ratification all peaceful and quiet. Profit sharing had been a big issue amongst the workforce many many people want it. 

So UAW has profit sharing but Unifor doesn’t?  That sucks.

[Oac98]

40 minutes ago, akirby said:

So UAW has profit sharing but Unifor doesn’t?  That sucks.

Ya tell me about it. 

[HotRunrGuy]

50 minutes ago, akirby said:

So UAW has profit sharing but Unifor doesn’t?  That sucks.

 

This article alludes that UNIFOR has typically negotiated a stronger hourly wage, rather than the uncertainty of profit sharing.  https://windsorstar.com/news/unifor-readies-for-first-post-pandemic-auto-contract-talks

 

HRG

[DeluxeStang]

So it looks like on average Ford is losing 32 grand on each EV they build. But, on the bright side, I believe they were losing about 50-60 grand per EV just a quarter or two earlier. So that's some pretty significant progress. Fords cost effective next gen EV platforms should also help them break even a lot sooner. 

[akirby]

43 minutes ago, HotRunrGuy said:

 

This article alludes that UNIFOR has typically negotiated a stronger hourly wage, rather than the uncertainty of profit sharing.  https://windsorstar.com/news/unifor-readies-for-first-post-pandemic-auto-contract-talks

 

HRG

I was about to say it’s a zero sum game so less in one area means more in another area.

[akirby]

18 minutes ago, DeluxeStang said:

So it looks like on average Ford is losing 32 grand on each EV they build. But, on the bright side, I believe they were losing about 50-60 grand per EV just a quarter or two earlier. So that's some pretty significant progress. Fords cost effective next gen EV platforms should also help them break even a lot sooner. 

Strictly a function of volume - 34k in 2Q vs 13k in 1Q.  They’ll be in the red until BOC and Oakville are built and online.

[DeluxeStang]

5 hours ago, akirby said:

Strictly a function of volume - 34k in 2Q vs 13k in 1Q.  They’ll be in the red until BOC and Oakville are built and online.

Let's hope it works out for them. It almost feels as though with each passing week, we're seeing how Ford cut corners, or rushed things to beat their consumers to market with their current EVs, and it's really hurt the reputation of those products. Now that they've had plenty of time to develop these next gen offerings, let's cross our fingers that they'll be profitable and well executed.

 

Having to cut prices to compete with brands like Tesla and increased production costs seem to be harming Ford more than many other OEM's. 

Edited July 28, 2023 by DeluxeStang

[jpd80]

7 hours ago, DeluxeStang said:

So it looks like on average Ford is losing 32 grand on each EV they build. But, on the bright side, I believe they were losing about 50-60 grand per EV just a quarter or two earlier. So that's some pretty significant progress. Fords cost effective next gen EV platforms should also help them break even a lot sooner. 

That’s oversimplified math.

 The reality is that Ford is progressively spending upwards of $50 billion on EVs and the infrastructure and batteries to make them so to be clear, the quarterly losses on Model E will continue for years until BEVs are like 50% of sales.

Edited July 28, 2023 by jpd80

[rperez817]

22 minutes ago, jpd80 said:

The reality is that Ford is progressively spending upwards of $50 billion on EVs and the infrastructure and batteries to make them so to be clear, the quarterly losses on Model E will continue for years until BEVs are like 50% of sales.

 

Good summary jpd80. Ford executives affirmed that concept in yesterday's investor call. However, Jim Farley's statement in that call that "the near-term pace of EV adoption will be a little slower than expected" is worrisome, because growth in the BEV market overall is accelerating.

[DeluxeStang]

36 minutes ago, rperez817 said:

 

Good summary jpd80. Ford executives affirmed that concept in yesterday's investor call. However, Jim Farley's statement in that call that "the near-term pace of EV adoption will be a little slower than expected" is worrisome, because growth in the BEV market overall is accelerating.

The overall size of the ev market may be increasing, but so are the number of competitors. Imagine a pie that's getting larger, but it's having way more slices cut out of it. Having all those rivals will reduce the sales numbers of most individual brands and slow their individual rate of growth.

 

When the mach-e arrived on the scene, it was one of a handful of performance oriented two row EV crossovers. You wanted a electric relatively small crossover, you basically had to buy a mach-e, or a model y. Now everyone and their cat is offering a two row EV crossover. The increase in supply has outpaced the increase in demand as a result of everyone jumping into the same segments. 

[fuzzymoomoo]

1 hour ago, DeluxeStang said:

The overall size of the ev market may be increasing, but so are the number of competitors. Imagine a pie that's getting larger, but it's having way more slices cut out of it. Having all those rivals will reduce the sales numbers of most individual brands and slow their individual rate of growth.

There’s no guarantee any of them survive though. Lordstown Motors was one of the more promising ones and they just declared bankruptcy. The only stand-alone I think is going to make it is Tesla in spite of their flaws. I’m not even sure Rivian will be around past the end of the decade. 

[jpd80]

20 minutes ago, fuzzymoomoo said:

There’s no guarantee any of them survive though. Lordstown Motors was one of the more promising ones and they just declared bankruptcy. The only stand-alone I think is going to make it is Tesla in spite of their flaws. I’m not even sure Rivian will be around past the end of the decade. 

Good point made there and while investing huge amounts of up front cash on EVs is no guarantee of survival but equally, not doing so could be a mortal blow to those businesses fence sitting today (thinking of just evolving ICE manufacturing into BEVs).

 

The pace of transition is not known and I suspect that Ford is again overly optimistic on the rate of uptake by American buyers, count me as a skeptic that thinks more slowing of BEV rollout will come next year, especially if higher interest rates begin to bite and take the enthusiasm out of vehicle buying…..we could see manufacturers going back to cash on the hood incentives this time next year if buyers go off the bite (not certain).

Edited July 29, 2023 by jpd80

[Rick73]

1 hour ago, fuzzymoomoo said:

There’s no guarantee any of them survive though. Lordstown Motors was one of the more promising ones and they just declared bankruptcy. The only stand-alone I think is going to make it is Tesla in spite of their flaws. I’m not even sure Rivian will be around past the end of the decade. 

Except for Tesla models, 2022 top 10 BEV list I saw were from ICE companies including Ford, GM, Kia, Hyundai and VW.  It’s possible that if BEVs are adopted at much slower rate, you may be correct for BEV-dedicated manufacturers that they may go bankrupt, but companies like VW will just slow down BEV manufacturing and rely on ICE and hybrids.  I mention VW only because of recent news about slowing BEV manufacturing.

[Rick73]

3 hours ago, rperez817 said:

 

Good summary jpd80. Ford executives affirmed that concept in yesterday's investor call. However, Jim Farley's statement in that call that "the near-term pace of EV adoption will be a little slower than expected" is worrisome, because growth in the BEV market overall is accelerating.

Recent comments from U.K. prime minister Sunak regarding possible delay on 2030 ICE ban suggests some politicians are questioning previous decisions.  He mentioned the following, though others quickly contradicted.  My take is that decision makers are starting to see and consider bigger picture.

 

“Sunak not only failed to confirm that the UK would move forward with its proposed 2030 ICE ban as planned, but also noted that any proposed legislation that would “unfairly impact the public” will be toned down. “

 

https://fordauthority.com/2023/07/uk-official-seemingly-backs-down-from-planned-2030-ice-ban/

[jpd80]

20 minutes ago, Rick73 said:

Recent comments from U.K. prime minister Sunak regarding possible delay on 2030 ICE ban suggests some politicians are questioning previous decisions.  He mentioned the following, though others quickly contradicted.  My take is that decision makers are starting to see and consider bigger picture.

 

“Sunak not only failed to confirm that the UK would move forward with its proposed 2030 ICE ban as planned, but also noted that any proposed legislation that would “unfairly impact the public” will be toned down. “

 

https://fordauthority.com/2023/07/uk-official-seemingly-backs-down-from-planned-2030-ice-ban/

In other news, UK ‘s Prime Minister feels branch crack beneath him