Published - July 28th, 2023 @ 10:00 AM (GMT+2)

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Ford Beats Q2 Expectations.
Lifts Full-year Guidance Amid EV Losses

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Ford Motor Company (NYSE:F) witnessed an upswing in stock prices after strong Q2 earnings, raising its full-year profit forecast but anticipating larger annual losses in the EV division. The improvement comes on the back of rival GM's (GM) strong earnings and raised profit guidance. 
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Ford has significant Q2 Improvement and Full-Year Guidance Adjustment.
For the quarter, Ford reported a 12% improvement with a top-line revenue of $45.0 billion, beating the expected $40.17 billion, and adjusted EBIT of $3.8 billion. Adjusted earnings per share (EPS) stood at 0.72, surpassing the $0.54 consensus estimate. The full-year 2023 guidance for adjusted EBIT was raised from a previous range of $9 billion-$11 billion to a new estimate of $11 billion to $12 billion. Ford's adjusted free cash flow forecast also saw a rise to between $6.5 billion and $7 billion, up from a prior $6 billion projection.

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Earnings Expectations for Business Segments in 2023

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Ford Blue and Ford Pro's profit guidance saw an increase, with full-year loss projections for the Model e unit also increasing. EBIT expectations for 2023 stand at $8 billion for Ford Blue, $8 billion for Ford Pro, and a full-year loss of $4.5 billion for the Model e unit. 

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Slow EV Adoption and Q2 Sales Figures

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EV adoption will be slower than initially expected, benefiting early adopters like Ford, according to CEO Jim Farley. Q2 sales increased by 9.9% from last year to 531,662 vehicles. Despite this, the company reported a 2.8% drop in EV sales for the quarter. Ford expects to reach a 600,000-unit EV production run rate during 2024, moving towards a 2 million annual run rate.
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Analysts believe that the slowdown in EV adoption could benefit Ford due to its dominant position in North America. However, increased EV adoption is expected to pick up by 2024-2025, and Ford will need to adapt to maintain its position. 
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Ford's Q2 performance surpassed expectations, leading to a boost in full-year guidance. However, losses in the EV division pose a challenge. Despite a projected slowdown, the anticipated rise in EV adoption by 2024-2025 promises an interesting future for Ford.
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