10-QPeriod: Q3 FY2023

FORD MOTOR CO Quarterly Report for Q3 Ended Sep 30, 2023

Filed October 27, 2023For Securities:FF-PCF-PDF-PB

Summary

Ford Motor Company's (F) third quarter 2023 results show a significant turnaround from the previous year, with net income attributable to Ford Motor Company reaching $1.2 billion, a substantial increase from a net loss of $827 million in the prior year's third quarter. This improvement was driven by higher revenues across all segments, particularly in Ford Pro and Ford Blue, and the non-recurrence of significant impairment charges related to investments in Argo AI and Rivian. Adjusted EBIT also saw a healthy increase, reaching $2.2 billion. Despite the positive top-line and profitability growth, the company is facing headwinds. The ongoing UAW strike, with a tentative agreement reached but not yet ratified, has already impacted production and is expected to result in a significant increase in labor costs over the contract's life. Furthermore, lower-than-anticipated electric vehicle (EV) adoption rates are leading Ford to reconsider its EV spending and production plans, with potential for further charges related to EV suppliers. The company withdrew its full-year 2023 guidance due to these uncertainties, highlighting the volatile operating environment.

Financial Highlights

51 data points
Beta

Revenue

$43.80B

14.3% Gross Margin

Net Income

$1.17B

2.7% Net Margin

EPS (Diluted)

$0.30

Total Assets

$268.07B

Cash & Equivalents

$26.63B

Free Cash Flow

$4.59B

Financial Statements
Beta
Revenue$43.80B
Cost of Revenue$37.55B
Gross Profit$6.25B
SG&A Expenses$2.67B
Operating Expenses$42.67B
Operating Income$1.13B
Net Income$1.17B
EPS (Basic)$0.30
EPS (Diluted)$0.30
Shares Outstanding (Basic)4.00B
Shares Outstanding (Diluted)4.05B

Key Highlights

  • 1Net income attributable to Ford Motor Company was $1.2 billion for Q3 2023, a significant improvement from a net loss of $827 million in Q3 2022.
  • 2Total revenues increased by 11% to $43.8 billion in Q3 2023, driven by strong performance in Ford Pro and Ford Blue segments.
  • 3Adjusted EBIT rose to $2.2 billion in Q3 2023, up from $1.8 billion in Q3 2022, indicating improved operational profitability.
  • 4The company experienced a $717 million increase in its Ford Model e segment EBIT loss, primarily due to higher material costs, lower pricing, and increased warranty expenses.
  • 5Ford withdrew its full-year 2023 guidance due to significant uncertainties stemming from the UAW strike and the evolving EV market.
  • 6The UAW strike has impacted production and is estimated to reduce full-year 2023 adjusted EBIT by approximately $1.3 billion, with a significant increase in expected labor costs over the contract's life.
  • 7Ford is re-evaluating its EV strategy and spending due to lower-than-anticipated industry adoption rates, potentially leading to further charges from EV-related suppliers.

Frequently Asked Questions

Ford reported a net income attributable to Ford Motor Company of $1.2 billion for the third quarter of 2023. This is a significant improvement compared to the net loss of $827 million recorded in the third quarter of 2022. Adjusted EBIT also increased to $2.2 billion from $1.8 billion year-over-year.

The improved results were primarily driven by higher revenues across all segments, particularly Ford Pro and Ford Blue. This was also aided by the non-recurrence of significant impairment charges related to investments in Argo AI and Rivian, which negatively impacted the prior year's results. Favorable net pricing and lower commodity costs also contributed positively.

The main challenges include the ongoing uncertainty and potential cost increases related to the UAW labor negotiations (a tentative agreement has been reached but is subject to ratification), and slower-than-expected adoption rates for electric vehicles (EVs). The EV market slowdown is causing Ford to reassess its strategy and may lead to additional charges from EV suppliers. The company has withdrawn its full-year 2023 guidance due to these uncertainties.

Ford is closely monitoring the lower-than-anticipated industrywide EV adoption rates. They are considering adjustments to their EV spending and production plans to better align with market demand. The company has also accrued charges related to EV suppliers and may incur further charges if contracts cannot be restructured or if alternative purchasers are not found for materials.