10-QPeriod: Q1 FY2022

FORD MOTOR CO Quarterly Report for Q1 Ended Mar 31, 2022

Filed April 28, 2022For Securities:FF-PCF-PDF-PB

Summary

Ford Motor Company reported a net loss of $3.11 billion for the first quarter of 2022, a significant shift from the $3.26 billion net income in the prior year's first quarter. This loss was largely driven by a $5.4 billion mark-to-market loss on its investment in Rivian, impacting "Other income/(loss), net". Excluding this "special item" and other related adjustments, Ford's adjusted EBIT was $2.33 billion, down from $3.91 billion in Q1 2021, reflecting lower Automotive segment performance due to persistent supply chain constraints, particularly the semiconductor shortage, which reduced wholesale volumes and impacted product mix. Despite the net loss, revenue for the quarter was $34.48 billion, a slight decrease from $36.23 billion in Q1 2021. The Automotive segment's EBIT margin declined to 5.9% from 10.1%, primarily due to increased commodity and freight costs, higher warranty expenses, and unfavorable product mix stemming from supply constraints on popular models. However, strong net pricing in the Automotive segment provided some offset. Ford Credit's EBT remained robust, though slightly lower year-over-year, benefiting from strong used vehicle auction values and a low loss-to-receivables ratio, despite a decrease in total net receivables.

Financial Highlights

51 data points
Beta

Revenue

$34.48B

15.8% Gross Margin

Net Income

-$3.11B

-9.0% Net Margin

EPS (Diluted)

$-0.78

Total Assets

$252.99B

Cash & Equivalents

$21.28B

Free Cash Flow

-$1.08B

Financial Statements
Beta
Revenue$34.48B
Cost of Revenue$29.04B
Gross Profit$5.44B
SG&A Expenses$2.74B
Operating Expenses$33.13B
Operating Income$1.34B
Net Income-$3.11B
EPS (Basic)$-0.78
EPS (Diluted)$-0.78
Shares Outstanding (Basic)4.01B
Shares Outstanding (Diluted)4.01B

Key Highlights

  • 1Reported a Q1 2022 net loss of $3.11 billion, primarily due to a $5.4 billion mark-to-market loss on the Rivian investment.
  • 2Adjusted EBIT was $2.33 billion, down from $3.91 billion in Q1 2021, reflecting lower Automotive segment performance.
  • 3Total revenues decreased slightly to $34.48 billion from $36.23 billion year-over-year.
  • 4Automotive segment EBIT margin compressed to 5.9% from 10.1% due to supply chain issues, higher costs, and unfavorable mix.
  • 5Wholesale volumes in the Automotive segment decreased by 9% year-over-year due to semiconductor shortages impacting production.
  • 6Ford Credit's EBT remained strong at $928 million, supported by favorable used vehicle market conditions and low credit losses.
  • 7Company ended the quarter with $28.8 billion in Company cash (excluding Ford Credit), with a liquidity position of $44.6 billion.

Frequently Asked Questions

The primary driver of Ford's net loss of $3.11 billion in Q1 2022 was a $5.4 billion mark-to-market loss on its investment in Rivian, which significantly impacted the 'Other income/(loss), net' line item. This 'special item' overshadowed the operational performance of the business.

Persistent supply chain disruptions, particularly the semiconductor shortage, significantly impacted Ford's operational results. This led to a 9% decrease in wholesale volumes for the Automotive segment, reduced revenues, and contributed to an unfavorable product mix. These factors, combined with increased commodity and freight costs, led to lower profitability within the Automotive segment, with the EBIT margin shrinking to 5.9%.

Ford provided an outlook for 2022 expecting adjusted EBIT between $11.5 billion and $12.5 billion and adjusted free cash flow between $5.5 billion and $6.5 billion. This guidance is based on assumptions of improved semiconductor availability in the second half of the year, continued strong pricing, and increased wholesale volumes, though it also accounts for significant commodity cost increases and ongoing investments in their 'Ford+' plan.

Ford Credit continues to perform well, reporting strong Earnings Before Taxes (EBT) of $928 million, albeit slightly lower than the prior year. This performance is supported by high used vehicle auction values and a very low loss-to-receivables ratio. While its total net receivables decreased due to lower vehicle production, Ford Credit remains a stable contributor to Ford's overall financial results.