Ford Motor Company reported its fourth quarter and full year 2023 financial results on February 6th, 2024. The company beat earnings expectations but posted a net loss for the quarter. Despite economic headwinds, Ford sees a profitable 2024 driven by new product launches and strong demand for its trucks and SUVs.
Q4 Financial Results
For the fourth quarter, Ford reported:
- Revenue of $46 billion, up 17% year-over-year and ahead of analyst estimates of $41.4 billion
- Adjusted EPS of $0.29, beating expectations of $0.17
- Net loss of $526 million. This includes a $2.6 billion non-cash accounting charge related to pensions. Excluding this, net income was $2 billion.
Key Q4 Metrics
| Metric | Result | Change YOY |
|---|---|---|
| Revenue | $46 billion | +17% |
| Adjusted EPS | $0.29 | -57% |
| Net Income | -$526 million | -106% |
Ford’s Q4 revenue growth was driven by higher volume across all segments and favorable pricing. However, higher warranty costs and unfavorable exchange rates negatively impacted earnings.
For the full year 2023, Ford reported revenue of $156.3 billion, net income of $6.6 billion and adjusted EPS of $2.12.
2024 Outlook
Despite economic uncertainty, Ford expects 2024 to be another solidly profitable year driven by new EV and truck launches and moderating costs.
For 2024, Ford guided for:
- Adjusted EPS between $9 billion – $11 billion, up 21% at the midpoint over 2023
- Adjusted FCF between $6 billion – $8 billion
CFO John Lawler commented: “We are accelerating our efforts to improve cost and drive growth – keeping us on track to achieve our medium-term profitability targets.”
Special Dividend
Ford surprised investors by announcing a special supplemental dividend of $0.18 per share in addition to its regular $0.15 dividend. This signals Ford’s strong free cash flow generation and commitment to shareholder returns.
Reaction
The stock market reacted positively to Ford’s results, sending shares up over 7% in after-hours trading. Investors welcomed the strong Q4 revenue beat, positive 2024 guidance and the announcement of an extra dividend.
However, some analysts pointed out inflation and other macro headwinds that could impact Ford’s ability to hit its 2024 targets. There are also concerns around increased competition in the EV space.
Commercial Trucks Shine
Ford’s commercial truck business was a bright spot, with Q4 EBIT up 15% year-over-year. This segment is expected to drive a lot of Ford’s profits in 2024.
There is strong demand for Ford’s new gasoline-powered Super Duty trucks and E-Transit vans. Ford is prioritizing production of its most profitable trucks and commercial vehicles.
The F-150 Lightning EV pickup and E-Transit EV van are also selling well despite production constraints. Ford is rapidly scaling production capacity to meet demand.
New EV and Vehicle Launches
2024 will see several critical new vehicle launches for Ford:
- Q1 2024: Launch of 6th generation Mustang coupe and convertible
- Q2 2024: Start of Lincoln Star EV production
- Q3 2024: Launch of 4th generation Explorer and Aviator SUVs
- Q4 2024: Launch of F-150 Lightning EV Pro, AWD Mustang Mach-E
These new offerings will help Ford compete with rivals like GM, Stellantis and Tesla in the hotly contested EV space.
Challenges Remain
While the headlines were positive, Ford faces uphill battles with inflation, supply chain issues and rising material costs. There are also concerns around consumer demand weakening if a recession hits.
Ford reached a potentially expensive new labor deal with the UAW union last year that it will need to offset to protect profits.
Competition in EVs and autonomous driving tech continues to intensify with Automakers and tech companies investing billions.
However, with its iconic brand, popular trucks and new product pipeline, Ford seems poised for success in 2024. This earnings report gave investors confidence that Ford’s turnaround is sustainable.
To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.
