01—Abstract
Summary
Summary of the 10-Q filed October 29, 2024. Cited figures are marked; the original filing is the authoritative source.
Ford Motor Company reported its third quarter and first nine months results for 2024, demonstrating a mixed financial performance.
Total revenues increased year-over-year for both periods, reaching $46.2 billiona in Q3 2024 and $136.8 billion for the first nine months. However, net income attributable to Ford Motor Company decreased to $892 million for the third quarter of 2024, down from $1.2 billion in the prior year, and similarly declined for the first nine months from $4.9 billion to $4.1 billion. The company's performance was significantly impacted by "special items," particularly the cancellation of an all-electric three-row SUV program, which resulted in substantial charges.
Despite these headwinds, Ford Credit's performance showed strength, with a notable increase in Earnings Before Taxes (EBT). The company is also navigating evolving market dynamics, particularly in the electric vehicle (EV) sector, adjusting its strategy in response to lower-than-anticipated adoption rates and pricing pressures.
02—Key points
Key Highlights
- Total revenues for the third quarter of 2024 increased by 5% to $46.2 billion, and for the first nine months by 5% to $136.8 billion, indicating top-line growth.
- Net income attributable to Ford Motor Company declined by 26% to $892 million in Q3 2024 compared to $1.2 billion in Q3 2023, primarily due to significant "special items."
- Special item charges totaled $1.4 billion in Q3 2024, largely driven by the cancellation of an EV program and restructuring actions, impacting profitability.
- Ford Credit's performance improved, with its third quarter 2024 EBT rising to $544 million from $358 million in the prior year, driven by higher financing margins and receivables.
- Ford Model e segment continued to post significant losses, with an EBIT loss of $1.2 billion in Q3 2024, although this was a $105 million improvement year-over-year, reflecting cost reductions.
- Company adjusted free cash flow for the first nine months of 2024 was $5.9 billion, an increase from $4.8 billion in the prior year, demonstrating improved cash generation excluding certain items.
- The company is adjusting its EV strategy due to lower-than-anticipated industry adoption rates and pricing pressures, leading to significant charges related to program cancellations.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Ford Motor Co kept $0.02.
- Revenue$46.20B100.0%
- Cost of revenue−$40.17B87.0%
- Gross profit$6.03B13.0%
- Operating costs−$5.15B11.1%
- Operating income$880.0M1.9%
- Interest, other & tax$16.0M0.0%
- Net income$896.0M1.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 29, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $46.20B$43.80B | +5.5% |
| Cost of Revenue | $40.17B$37.55B | +7.0% |
| Gross Profit | $6.03B$6.25B | −3.6% |
| SG&A Expenses | $2.46B$2.67B | −8.0% |
| Operating Expenses | $45.32B$42.67B | +6.2% |
| Operating Income | $880.00M$1.13B | −22.1% |
| Net Income | $896.00M$1.17B | −23.6% |
| EPS (Basic) | $0.22$0.30 | −26.7% |
| EPS (Diluted) | $0.22$0.30 | −26.7% |
| Shares Outstanding (Basic) | 3.98B4.00B | −0.7% |
| Shares Outstanding (Diluted) | 4.02B4.05B | −0.8% |
05—Questions
Frequently Asked Questions
What is the main reason for the decrease in net income year-over-year?
The decrease in net income is primarily attributable to significant "special items," most notably charges related to the cancellation of a previously planned all-electric three-row SUV program, which amounted to $979 million in the third quarter of 2024. Restructuring actions and other charges also contributed to the impact on profitability.
How is Ford Credit performing, and what is driving its results?
Ford Credit demonstrated strong performance with its third quarter 2024 Earnings Before Taxes (EBT) increasing to $544 million, up from $358 million in the prior year. This improvement was mainly driven by higher financing margins and a larger net receivables balance, offset partially by lower expected auction values and higher return rates on existing operating leases.
What is Ford's outlook on the electric vehicle (EV) market, and how is it impacting the company?
Ford is observing lower-than-anticipated industrywide EV adoption rates and pricing pressures. This has led the company to adjust its spending, production, and product launches. These dynamics have resulted in significant charges, including $1.1 billion in Q3 2024 related to the cancellation of an EV program and potential future expenses. The company now expects a Ford Model e EBIT loss of approximately $5 billion for the full year 2024.
What is the company's liquidity position and capital resource outlook?
Ford maintains a strong liquidity position. At September 30, 2024, the company had $27.9 billion in Company cash and $46.1 billion in total liquidity. Ford targets maintaining Company cash at or above $20 billion, plus additional liquidity. The company plans to fund its material cash requirements through existing liquidity and cash flows from operations.
06—Continue