Ford shatters Wall Street’s earnings expectations, raises guidance for the year on new vehicle demand

DETROIT – Ford Motor nearly doubled Wall Street's earnings expectations and slightly beat revenue projections for the third quarter, leading the automaker to increase its annual guidance for the second time this year.

Here's how Ford performed versus what Wall Street expected based on average analyst estimates compiled by Refinitv.

  • Adjusted EPS: 51 cents per share adj. vs. 27 cents per share expected
  • Automotive revenue: $33.21 billion vs. $32.54 billion expected

Ford's shares jumped by about 5% during after-hours trading. The stock closed Wednesday down by 2.7% to $15.51 a share.

The automaker's new full-year adjusted earnings guidance is between $10.5 billion and $11.5 billion, up from between $9 billion and $10 billion. Ford maintained its expectations for adjusted free cash flow of between $4 billion and $5 billion.

The company increased annual guidance despite CFO John Lawler previously saying the second half of the year would be weaker than the first six months. He had cited $3 billion to $4 billion in favorable higher sales volumes, but said commodity costs, lower earnings from Ford Credit and other factors such as $500 million in higher warranty costs to drag down its results during the back end of the year.

On an unadjusted basis, Ford's net income was $1.8 billion compared with $2.4 billion a year earlier, when dealerships and plants largely reopened after being shuttered during some of the second quarter due to the coronavirus pandemic. The automaker reported pretax adjusted earnings of $3 billion for the third quarter, down from $3.6 billion a year earlier.

Its automotive revenue was down 5% during the quarter compared to $34.7 billion in the third quarter of 2020

Ford's stock is up by about 80% this year, so aside from third-quarter earnings, investors will be watching for any additional drag on the automaker heading into next year.

Ford received a couple bullish calls from Wall Street analysts heading into earnings, including an upgrade by Credit Suisse to outperform from neutral.

Ford's largest American rival, General Motors, reported third-quarter earnings Wednesday morning that beat Wall Street's estimates. Despite the beats, GM's stock declined by more than 5% during intraday trading due to the automaker lowering free cash flow guidance for the year and not meeting some investor expectations for the remainder of the year.

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