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Ford posted 3Q $1 billion earnings on the back of its very popular F-Series pickup.Ford
Ford Motor Company’s third-quarter earnings were bolstered by consumer appetite for ever more expensive and luxuriously appointed F Series pickups, but the automaker also said that headwinds such as struggles in China, Europe and South America, and Trump White House tariffs on steel and aluminum, as well as reciprocal tariffs from China, will cause the company to backtrack from its previously stated goals of an 8 percent EBIT margin or high-teens ROIC by 2020.
Ford’s revenue was up 3 percent year-over-year, with net income and company adjusted EBIT both down year over year, primarily driven by continued challenges in China, the company said. In North America, the company delivered an 8.8 percent EBIT margin, supported by more than $1 billion of improved vehicle mix, due to the continued shift towards sport utility vehicles and trucks, as well as high-end trim models.
Total net income was $1 billion on $37.6 billion in revenues.
“This quarter shows that our business remains very strong in key areas. We continue to make progress on our efforts to redesign Ford to be far more competitively fit, disciplined in capital allocations and nimble enough to win in a fast-changing world,” said Jim Hackett, Ford president and CEO. “With products like the Edge ST and Ranger launching in the United States and the Territory SUV in China, we are also building momentum shifting our product portfolio to build on our strengths and meet shifting consumer demand.”
Dividend Is Safe
Ford posted 3Q $1 billion earnings on the back of its very popular F-Series pickup.Ford
Ford shares have been hammered this year and were down 4.8% to $8.18 in trading on Wednesday, though investors, off the news on how robust Ford’s pickup truck business is, pushed shares up 6.4% in after-hours trading after Ford released its earnings. The company reaffirmed today also said that it will maintain its .15-cent quarterly dividend through a five-year “fitness” transformation through 2023.
In the U.S., Ford sold 482,512 trucks and SUV’s representing a 2.8 percent gain over the third quarter of 2017. F-Series average transaction prices increased by $858 per truck compared to a year ago, totaling $46,224. Its total market share was down, though, to 6.3% from 6.8% a year ago in the same quarter.
Ford has announced a phase-out and build-down of its sedans. Indeed, it has already stopped building its longtime Focus model. The Fiesta, Taurus and Fusion are next for phase-out, as well as Lincoln sedans. The company will have a lineup of trucks and SUVs that will be 75% remade between now and 2020. One of the vehicles they have high hopes for is a remake of the Ford Escape due next year, and the return of the Ford Bronco coming in 2020. “I’ve never seen dealers and customers so anxious for a product intro in my time at Ford,” said Ford Global President James Farley at last week’s dealer meeting in Las Vegas.
The automaker has $23.7 billion cash on hand, which is a very healthy position that gives Ford great flexibility and resilience to endure any sudden, or even gradual, declines in the auto market.
Ford Credit generated an EBIT of $678 million in the third quarter, driven by favorable volume and mix, as well as favorable lease residuals.
Ford today reaffirmed adjusted EPS guidance for the full year in the range of $1.30 to $1.50 and positive cash flow that will be lower than 2017.
In an attempt to bolster and focus its China business, Ford said Wednesday it is making China a stand-alone region, no longer part of the broader Ford Asia, and report to Ford’s global chiefs on Dearborn, Michigan.
“Success in China is critical as we reposition our global business for long-term success,” said Ford President and CEO Jim Hackett. “With today’s actions, we are strengthening our commitment to the China market and reorganizing our international markets to strengthen their performance.” The moves are designed to accelerate Ford’s return to profitable growth in China.
Ford Pluses:
-Healthy pickup business with rising transaction prices.
-Credible cost-cutting program that includes slashing marketing inefficiencies and forthcoming white-collar headcount reductions.
-Phase-out of unprofitable passenger sedans, which will cut losses and redirect resources to more profitable and popular crossovers and SUVs.
-Healthy and profitable commercial vehicles business where Ford holds an advantage over competitors.
Ford Minuses
-Underdeveloped business in China a drag on profits.
-No credible luxury nameplate. GM, Toyota, Nissan, Honda, Volkswagen and FCA are all mass-market companies like Ford but have luxury marques. Ford has Lincoln, but it’s not a credible competitor.
-Tariffs on steel and aluminum, plus tariffs imposed by China to retaliate against Trump tariffs will be a drag of about $1.5 billion a year, according to analyst estimates.
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Ford posted 3Q $1 billion earnings on the back of its very popular F-Series pickup.Ford
Ford Motor Company’s third-quarter earnings were bolstered by consumer appetite for ever more expensive and luxuriously appointed F Series pickups, but the automaker also said that headwinds such as struggles in China, Europe and South America, and Trump White House tariffs on steel and aluminum, as well as reciprocal tariffs from China, will cause the company to backtrack from its previously stated goals of an 8 percent EBIT margin or high-teens ROIC by 2020.
Ford’s revenue was up 3 percent year-over-year, with net income and company adjusted EBIT both down year over year, primarily driven by continued challenges in China, the company said. In North America, the company delivered an 8.8 percent EBIT margin, supported by more than $1 billion of improved vehicle mix, due to the continued shift towards sport utility vehicles and trucks, as well as high-end trim models.
Total net income was $1 billion on $37.6 billion in revenues.
“This quarter shows that our business remains very strong in key areas. We continue to make progress on our efforts to redesign Ford to be far more competitively fit, disciplined in capital allocations and nimble enough to win in a fast-changing world,” said Jim Hackett, Ford president and CEO. “With products like the Edge ST and Ranger launching in the United States and the Territory SUV in China, we are also building momentum shifting our product portfolio to build on our strengths and meet shifting consumer demand.”
Dividend Is Safe
Ford posted 3Q $1 billion earnings on the back of its very popular F-Series pickup.Ford
Ford shares have been hammered this year and were down 4.8% to $8.18 in trading on Wednesday, though investors, off the news on how robust Ford’s pickup truck business is, pushed shares up 6.4% in after-hours trading after Ford released its earnings. The company reaffirmed today also said that it will maintain its .15-cent quarterly dividend through a five-year “fitness” transformation through 2023.
In the U.S., Ford sold 482,512 trucks and SUV’s representing a 2.8 percent gain over the third quarter of 2017. F-Series average transaction prices increased by $858 per truck compared to a year ago, totaling $46,224. Its total market share was down, though, to 6.3% from 6.8% a year ago in the same quarter.
Ford has announced a phase-out and build-down of its sedans. Indeed, it has already stopped building its longtime Focus model. The Fiesta, Taurus and Fusion are next for phase-out, as well as Lincoln sedans. The company will have a lineup of trucks and SUVs that will be 75% remade between now and 2020. One of the vehicles they have high hopes for is a remake of the Ford Escape due next year, and the return of the Ford Bronco coming in 2020. “I’ve never seen dealers and customers so anxious for a product intro in my time at Ford,” said Ford Global President James Farley at last week’s dealer meeting in Las Vegas.
The automaker has $23.7 billion cash on hand, which is a very healthy position that gives Ford great flexibility and resilience to endure any sudden, or even gradual, declines in the auto market.
Ford Credit generated an EBIT of $678 million in the third quarter, driven by favorable volume and mix, as well as favorable lease residuals.
Ford today reaffirmed adjusted EPS guidance for the full year in the range of $1.30 to $1.50 and positive cash flow that will be lower than 2017.
In an attempt to bolster and focus its China business, Ford said Wednesday it is making China a stand-alone region, no longer part of the broader Ford Asia, and report to Ford’s global chiefs on Dearborn, Michigan.
“Success in China is critical as we reposition our global business for long-term success,” said Ford President and CEO Jim Hackett. “With today’s actions, we are strengthening our commitment to the China market and reorganizing our international markets to strengthen their performance.” The moves are designed to accelerate Ford’s return to profitable growth in China.
Ford Pluses:
-Healthy pickup business with rising transaction prices.
-Credible cost-cutting program that includes slashing marketing inefficiencies and forthcoming white-collar headcount reductions.
-Phase-out of unprofitable passenger sedans, which will cut losses and redirect resources to more profitable and popular crossovers and SUVs.
-Healthy and profitable commercial vehicles business where Ford holds an advantage over competitors.
Ford Minuses
-Underdeveloped business in China a drag on profits.
-No credible luxury nameplate. GM, Toyota, Nissan, Honda, Volkswagen and FCA are all mass-market companies like Ford but have luxury marques. Ford has Lincoln, but it’s not a credible competitor.
-Tariffs on steel and aluminum, plus tariffs imposed by China to retaliate against Trump tariffs will be a drag of about $1.5 billion a year, according to analyst estimates.
