Ford raises full-year guidance after solid earnings beat

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Ford Mustang on display at the NY Auto Show, April 6, 2023.
Scott Mlyn | CNBC

DETROIT – Ford Motor is reporting second-quarter earnings after the markets close Thursday.

The Detroit automaker is expected to report solid results, but not as strong as the $1.91 in adjusted earnings per share that crosstown rival General Motors reported Tuesday.

Here’s what Wall Street expects from Ford, based on average analyst estimates compiled by Refinitiv:

  • Adjusted earnings per share: 55 cents
  • Automotive revenue: $40.38 billion

Those results would mark a year-over-year increase of 6.5% in automotive revenue, but a nearly 20% decline in adjusted EPS. The company’s earnings during the second quarter of 2022 were assisted by high vehicle prices amid lower inventory levels.

The company reported net income of $667 million on total revenue of $40.19 billion during the second quarter of 2022.

There’s pressure on Ford after GM raised its yearly guidance Tuesday for the second time this year.

In May, Ford reiterated that it expects full-year adjusted earnings of between $9 billion and $11 billion and roughly $6 billion in adjusted free cash flow. Ford said it plans to have capital expenditures of between $8 billion and $9 billion in 2023.

Also in May, the automaker began reporting its financial results by business unit, instead of by region. The Detroit automaker earlier this year released revised results for 2021 and 2022 according to the new structure.

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Ford Motor vs. General Motors stock performance

Much attention will be on Ford’s “Model e” electric vehicle business, which lost $2.1 billion last year on an operating basis and $722 million in the first quarter of this year, wider than year-ago losses as it ramped up EV production.

The automaker recently cut pricing by as much as $10,000 on the F-150 Lightning pickup as production and inventory levels increase.

Wall Street analysts on Tuesday criticized the slow rollout of GM’s electric vehicles and questioned the automaker’s EV strategy regarding pricing, sales targets and a decision to revive the Chevy Bolt months after announcing its discontinuation.

Ford is likely to face similar scrutiny over its own EV investment strategy, according to Morgan Stanley analyst Adam Jonas.

“Both GM and Ford are highly visible examples of the challenges in on-shoring advanced EV battery technology in a profitable way at scale,” Jonas said in a Wednesday investor note.

Investors also are eager to hear about any additional insights regarding what are expected to be challenging contract negotiations with the UAW union. Buoyed by a yearslong national labor movement, new leadership and record company profits, the negotiations are expected to be among the most contentious in recent memory.

The talks formally kicked off earlier this month between the union and GM, Ford Motor and Stellantis. The current contracts are set to expire Sept. 14 and cover roughly 150,000 UAW members who work for the automakers.

– CNBC’s Michael Bloom contributed to this report.

This is breaking news. Please check back for updates.

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