Ford Slightly Beats EPS with a Shocking $1.2 Billion in EV Losses - Shares Plunge -8.83%

Well friends, Ford Motor Company, in keeping with its century-old tradition of occasionally shooting itself in the foot with remarkable precision, has once again managed to disappoint literally everyone. 

(Source: Giphy) 

In short, instead of blowing the socks off of analysts, Ford put on an absolute clinic in lowering expectations as the company announced Monday that its 2024 earnings will scrape the bottom of its previous forecast barrel—a revelation that shocked absolutely no one who's been paying attention to the automotive industries (hello, Volkswagen). 

(Source: Yahoo Finance) 

For instance, Ford’s adjusted earnings before interest and taxes (EBIT) for 2024 are now expected to hover around $10 billion. That’s the low end of the $10-$12 billion range they floated earlier in the year. Not exactly the kind of news you want to hear, especially when everyone’s worried about rising inventory and softening demand.

What’s more is that while everyone was holding onto the tether of Ford’s $2 billion cost cuts they promised… they haven’t actually stolen the show with investor confidence. Now sure, they technically have been made,  but inflation and warranty costs are eating into those savings faster than my F-150 digests gas. 

(Source: Giphy) 

However, when it comes to Q3 EPS, Ford posted adjusted earnings per share of 49 cents, slightly ahead of the 47 cents analysts were expecting. Automotive revenue hit $43.07 billion, also topping the $41.88 billion Wall Street had penciled in. 

Additionally, Ford’s net income for the quarter came in at $896 million, or 22 cents per share, while adjusted EBIT rose 16% year-over-year to $2.55 billion. So, not bad, right?  Well, not quite. The EV division, dubbed "Model e" (because apparently, the letter 'e' makes everything sound future-proof), continues to hemorrhage money with the enthusiasm of a lottery winner in Vegas, losing $1.22 billion in Q3.

(Source: Electrive) 

Now, CEO Jim Farley insists they're still committed to electrification, but with inventory looking like someone ordered for a party that nobody showed up to (a.k.a. 91 days' worth of vehicles just chillin' in lots across America) - it’s clear that Ford’s  EV losses are one of the main reasons they’re stuck at the low end of their full-year profit guidance.

For this reason, combined with warranty costs ballooning to $800 million, shares plunged 5% after-hours trading (-8.83% at the time of this writing). Meaning, despite a slight beat on earnings and revenue, it just wasn’t enough to erase the bad taste left from Q2 - especially with Q3’s lowered expectations. 

(Source: Giphy) 

In the end,  If Ford wants to get back in Wall Street’s good graces, they’re going to need to tighten up their EV game, keep chipping away at those warranty costs, and—let’s be honest—probably just cross their fingers for a little bit of luck. 

As always, stay safe, stay frosty, and keep a close eye on your Ford holdings (if you have ‘em)! Until next time friends… 

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Stocks.News holds positions in Ford as mentioned in the article.