10-QPeriod: Q1 FY2021

FORD MOTOR CO Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 29, 2021For Securities:FF-PCF-PDF-PB

Summary

Ford Motor Company reported a strong first quarter in 2021, demonstrating a significant turnaround from the prior year's loss. Net income attributable to Ford Motor Company surged to $3,262 million, compared to a net loss of $1,993 million in the first quarter of 2020. This profitability was driven by improved performance across segments, particularly in Automotive, with higher net pricing and favorable mix contributing significantly. Despite ongoing challenges like the semiconductor shortage, Ford managed to increase revenues to $36,228 million, up from $34,320 million year-over-year. The company's financial health also improved, with Company Adjusted EBIT reaching $4,816 million and Adjusted ROIC increasing to 8.2%. A notable contributor to 'Other Income/(Loss)' was a $902 million non-cash gain from Ford's investment in Rivian. While the semiconductor shortage continues to pose a risk to production volumes throughout 2021, the company's proactive management and strategic initiatives appear to be yielding positive financial results.

Financial Highlights

50 data points
Beta

Revenue

$36.23B

19.1% Gross Margin

Net Income

$3.26B

9.0% Net Margin

EPS (Diluted)

$0.81

Total Assets

$260.82B

Cash & Equivalents

$22.05B

Free Cash Flow

$4.49B

Financial Statements
Beta
Revenue$36.23B
Cost of Revenue$29.30B
Gross Profit$6.93B
SG&A Expenses$2.84B
Operating Expenses$33.76B
Operating Income$2.46B
Net Income$3.26B
EPS (Basic)$0.82
EPS (Diluted)$0.81
Shares Outstanding (Basic)3.98B
Shares Outstanding (Diluted)4.02B

Key Highlights

  • 1Net income attributable to Ford Motor Company was $3,262 million, a substantial recovery from a net loss of $1,993 million in Q1 2020.
  • 2Total revenues increased to $36,228 million, up 5.5% from $34,320 million in Q1 2020.
  • 3Automotive segment EBIT saw a significant improvement, reaching $3,403 million, up from a loss of $154 million in Q1 2020, driven by higher net pricing and favorable product mix.
  • 4Company Adjusted EBIT was $4,816 million, a substantial increase from negative $632 million in Q1 2020, indicating improved operational profitability.
  • 5Ford Credit demonstrated strong performance with EBT of $962 million, a significant rise from $30 million in Q1 2020, benefiting from improved credit loss provisions and favorable auction values.
  • 6The company reported a non-cash gain of $902 million related to its investment in Rivian, contributing to the 'Other Income/(Loss)' line item.
  • 7Despite challenges, Ford maintains a strong liquidity position with $31.3 billion in Company cash and $47.2 billion in Company liquidity as of March 31, 2021.

Frequently Asked Questions

The significant increase in net income was primarily driven by strong performance in the Automotive segment, which benefited from higher net pricing, favorable product mix, and lower warranty expenses. Improved results from Ford Credit, including lower credit loss provisions and favorable auction values for off-lease vehicles, also contributed significantly. Additionally, a non-cash gain of $902 million from the investment in Rivian boosted 'Other Income/(Loss)'.

Ford acknowledged the persistent semiconductor shortage, which significantly impacted production volumes in Q1 2021 (eliminating about 17% of planned production). The company now expects the shortage to persist into 2022. For the full year 2021, Ford projects a loss of about 1.1 million wholesale units, translating to an estimated $2.5 billion headwind to adjusted EBIT. Q2 2021 is expected to be the trough for performance due to these constraints.

Ford Credit experienced a robust first quarter, with EBT of $962 million, a substantial improvement from $30 million in Q1 2020. This was driven by the non-recurrence of significant credit loss reserve increases related to COVID-19 and strong auction performance for off-lease vehicles. Ford Credit maintains a strong liquidity position and forecasts improved EBT for the full year 2021 compared to 2020, with higher auction values expected.

Ford is executing a global redesign to improve profitability and competitiveness. In March 2021, Ford issued $2.3 billion in 0% Convertible Senior Notes due 2026. The company also acquired Magna's shares in a restructured Getrag Ford Transmissions GmbH (GFT) joint venture and is in the process of selling its controlling interest in Ford Taiwan, which is expected to result in a pre-tax gain in Q2 2021.