Ford reported his first quarter 2023 earnings Tuesday after the bell marks the first time the legacy automaker will break out earnings for its three new business units: Ford Blue for iconic gasoline and hybrid vehicles, Ford Model e for electric vehicles and Ford Pro for products. and business services.
The automaker reported revenue of $41.5 billion, beating Wall Street expectations of $36 billion and showing a 20% improvement over the same period last year. Despite Ford’s push to electrify its fleet, that pace was largely driven by sales of gasoline, hybrid and commercial vehicles.
Ford’s net income on a GAAP basis was $1.8 billion, compared with a net loss of $2.0 billion in the 2022 period due to a $7.3 billion writedown on the automaker’s Rivian investment.
On an adjusted earnings basis, Ford earned $3.4 billion, an increase of 45% from the first quarter of 2022 and a margin of 8.1%.
Ford’s guidance for the full year stayed the same between $9 billion and $11 billion in adjusted earnings. The company expects to have adjusted free cash flow of around $6 billion in 2023.
By segment, Ford expects 2023 to see $7 billion for Ford Blue, a slight increase from last year; a full-year loss of about $3 billion for the Model e; and EBIT of around $6 billion for Pro, which would double 2022 earnings.
Ford said operating cash flow for the quarter was $2.8 billion and that it generated $693 million in adjusted free cash flow. The automaker closed the quarter with nearly $29 billion in cash on hand.
Breakdown of Ford’s business segments
This is the first quarter that Ford has broken out earnings across its three business units: Ford Blue, Ford Model e and Ford Pro. Image Credits: Ford Motor Co.
Ford continues to make losses in its electric vehicle business, which it often describes as a “start-up.” The unit brought in $700 million in revenue, a 27% decrease from last year, partly attributable to production disruptions to two of Ford’s most popular electric vehicles: the F-150 Lightning pickup truck and the Mustang SUV. Mach-E. Ford said Mach-E production was disrupted by “industrial changes that will nearly double manufacturing capacity,” which may explain Ford’s most recent change. vehicle price drop.
That is the second time that Ford has cut the price on the Mach-E This room. The first time was in January and followed similar price cuts from Tesla.
Ford aims to sell electric vehicles at a global run rate of 600,000 units by the end of 2023 and more than 2 million by the end of 2026. The automaker will have to build and ship quickly if it wants to meet that goal. just ford reported 10,866 EV units sold in the first quarter of this year.
Despite the losses within the Model e, Ford’s other two units were more than enough to push the automaker into growth territory. Ford said the Ford Blue and Ford Pro business segments were profitable in all regions where they operate. The automaker shipped 1.1 million vehicles in the quarter, up 9% year-over-year, with the majority of sales coming from gas, hybrid and electric Ford pickup trucks, commercial vans and SUVs, according to the company.
For the first quarter, Ford Blue generated revenue of $25.1 billion, up 21% from last year. On an adjusted basis, that’s $2.6 billion. The automaker says it expects to continue to see high growth in this segment.
Ford Pro reported $13.2 billion, an increase of 28% over last year. In terms of EBIT, that’s $1.4 billion, which is triple what was reported in 2022. That growth was driven by both sales of Ford’s Transit and E-Transit commercial vans, as well as a 64% increase in sales. paid software subscriptions in the first quarter.
The automaker’s pretax credit earnings were $303 million, down from last year due to a lower financing margin, higher credit losses and lower lease income, according to Ford.
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