10-QPeriod: Q1 FY2018

FORD MOTOR CO Quarterly Report for Q1 Ended Mar 31, 2018

Filed April 26, 2018For Securities:FF-PCF-PDF-PB

Summary

Ford Motor Company reported a solid first quarter in 2018, demonstrating revenue growth driven by higher volumes and favorable pricing, despite a slight dip in wholesale units. Net income attributable to Ford increased to $1.736 billion from $1.592 billion in the prior year's quarter, with diluted earnings per share rising to $0.43 from $0.40. This performance was bolstered by a lower effective tax rate, partially offset by increased commodity costs and adverse exchange effects impacting the Automotive segment. The Ford Credit segment also showed significant improvement, with earnings before taxes increasing by $160 million year-over-year, attributed to growth in receivables globally and healthy U.S. consumer credit metrics. The company maintained a strong liquidity position with substantial cash and marketable securities, aiming to balance investments in future growth, debt obligations, and shareholder returns. The company is also navigating significant investments in its Mobility segment, which incurred a loss due to autonomous vehicle development, signaling a strategic shift towards future technologies.

Financial Highlights

47 data points
Beta

Revenue

$41.96B

14.8% Gross Margin

Net Income

$1.74B

4.1% Net Margin

EPS (Diluted)

$0.43

Total Assets

$267.23B

Cash & Equivalents

$18.14B

Free Cash Flow

$3.51B

Financial Statements
Beta
Revenue$41.96B
Cost of Revenue$35.75B
Gross Profit$6.21B
SG&A Expenses$2.75B
Operating Expenses$40.84B
Net Income$1.74B
EPS (Basic)$0.44
EPS (Diluted)$0.43
Shares Outstanding (Basic)3.97B
Shares Outstanding (Diluted)4.00B

Key Highlights

  • 1Total revenues increased by 7% to $41.96 billion in Q1 2018 compared to $39.15 billion in Q1 2017.
  • 2Net income attributable to Ford Motor Company rose to $1.736 billion ($0.43 EPS) from $1.592 billion ($0.40 EPS) in the same period last year.
  • 3Ford Credit segment's earnings before taxes improved significantly, up $160 million year-over-year.
  • 4Automotive segment faced headwinds from commodity cost increases ($480 million) and adverse exchange effects ($240 million), partially offset by higher net pricing and favorable stock changes in North America.
  • 5Mobility segment reported a loss of $102 million, primarily due to increased investment in autonomous vehicle development.
  • 6Company maintained a strong liquidity position with $27.6 billion in Company cash, cash equivalents, and marketable securities (excluding Ford Credit).
  • 7Ford Credit's managed leverage was 8.4x, within the target range of 8:1 to 9:1.

Frequently Asked Questions

The primary driver for the increase in net income attributable to Ford Motor Company in the first quarter of 2018 was a lower effective tax rate. This was partially offset by increased commodity costs and adverse exchange effects impacting the Automotive segment.

The Mobility segment incurred a loss of $102 million in the first quarter of 2018. This loss is primarily attributed to increased investment costs related to the development of autonomous vehicles. The segment did benefit from a one-time gain on investments in Smart Mobility.

Ford Credit experienced a strong quarter with a $160 million increase in earnings before taxes year-over-year, driven by growth in receivables and healthy U.S. consumer credit metrics. The segment's managed leverage was 8.4x, within the company's target range. Ford Credit plans to maintain its managed receivables and expects its full-year EBT to be flat-to-lower than 2017 due to rising interest rates.

The Automotive segment's profitability was impacted by higher commodity costs, largely related to metals, which amounted to approximately $480 million. Adverse exchange effects also contributed negatively, totaling around $240 million. These pressures were partially mitigated by higher net pricing and favorable stock changes in North America.