Ford Reports $49.5 Billion in Revenue and Adjusted Third-Quarter Earnings Above Estimates
Key Facts
Ford reported third-quarter results on October 28, posting revenue of $49.5 billion and adjusted earnings before interest and taxes of $2.7 billion. The company said adjusted earnings rose 3% year over year, while revenue fell 2% from the same period last year. Net income was $2 billion, compared with $2.4 billion a year earlier, while revenue declined from $50.5 billion. Adjusted earnings per share of 49 cents topped the average estimate of 40 cents from LSEG analysts. However, Reuters said the stock fell about 1.5% in after-hours trading following the announcement.
The divergence between revenue and adjusted earnings reflects an improvement in product mix and a greater contribution from higher-margin models, the company’s chief financial officer said. She said the mix includes Tremor trims and other off-road models, adding, "Higher earnings on a lower revenue base reflect our stronger product mix, which consists of higher-margin products." Ford said higher-margin off-road vehicles accounted for about a quarter of its U.S. sales during the quarter. The figures show adjusted operating profit grew as total revenue contracted, rather than expanded. Meanwhile, net income fell year over year, from $2.4 billion to $2 billion.
Performance varied across the main segments during the quarter, with losses continuing in the electric-vehicle business. Ford Model e posted a loss before interest and taxes of $1.1 billion, but improved 25% year over year. Ford Pro generated operating earnings before interest and taxes of $1.7 billion, down 16% from a year earlier. The company attributed the decline at Ford Pro to higher commodity costs, as well as temporary launch costs tied to Super Duty production in Oakville. Ford Blue reported earnings of $1.4 billion, down 10% from a year earlier.
Ford attributed the decline in Ford Blue earnings mainly to lower sales volume, citing the discontinuation of some products and the impact of the conflict in the Middle East and higher commodity costs. Across the company, it raised its estimate for commodity costs this year to about $2.5 billion, from nearly $2 billion in its previous estimate. The pressures cited in coverage include higher prices for copper, steel, fuel and chips. These costs are weighing on segment results as the company posts limited growth in adjusted earnings and a decline in revenue. The CFO said the company improved its full-year guidance for the third time this year, without disclosing the new guidance figure here.
Ford ended the quarter with total liquidity of $46.4 billion, including $25.3 billion in cash. The CFO said adjusted free cash flow was $4.7 billion during the quarter, lifting total liquidity to more than $46 billion. The company announced a regular fourth-quarter cash dividend of 15 cents per share, payable on December 1 to shareholders of record on November 10. Ford also said it plans to make annual capacity of 20 gigawatt-hours available in its energy business by the end of 2027. It targets reaching the full run rate for that capacity in the third quarter of 2028, and set a target for an adjusted earnings-before-interest-and-taxes margin of 8% by 2029.