Ford Motor is set to announce its first-quarter earnings after the markets close on Wednesday. According to average analyst estimates compiled by LSEG, the expectations are as follows: Earnings per share of 42 cents adjusted and Automotive revenue of $40.10 billion. This would represent a 2.6% increase in revenue compared to the previous year, but a significant 32.9% decline in adjusted earnings per share.
In the first quarter of 2023, Ford reported $39.09 billion in revenue, a net income of $1.8 billion, or 44 cents per share, and adjusted earnings before interest and taxes of $3.38 billion. Looking ahead, the automaker’s guidance for 2024 includes adjusted earnings before interest and taxes (EBIT) between $10 billion and $12 billion, adjusted free cash flow of $6 billion to $7 billion, and capital spending of $8 billion to $9.5 billion.
There seems to be less agreement on Ford’s performance among analysts on Wall Street compared to its competitor, General Motors. While Morgan Stanley considers Ford its “top pick,” UBS analyst Joseph Spak expressed a preference for GM over Ford in a recent investor note. One of the key concerns for Ford has been inflated warranty costs, including $1.9 billion in 2023, which have impacted its earnings. The company has acknowledged an annual $7 billion to $8 billion disadvantage compared to traditional competitors due to production costs, quality issues, and operational inefficiencies.
Investors will be closely monitoring improvements in Ford’s operational efficiency, particularly in reducing warranty costs and addressing quality issues. CEO Jim Farley’s “Ford+” restructuring plan, initiated in 2021, will also be under scrutiny for progress. Furthermore, any updates or delays to Ford’s all-electric vehicle plans will be of interest to investors as the automotive industry shifts towards electrification.
Ford’s first-quarter earnings announcement will provide insight into the company’s financial health and its ability to address challenges such as warranty costs and operational inefficiencies. It remains to be seen how the market will react to the results and the implications for Ford’s future growth and competitiveness in the automotive industry. Stay tuned for updates following the earnings release.
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