Ford Motor (F) Tops Q1 EPS by 65c, Revenues Beat; Sees Loss of 10% of 2nd-Half Production

Ford Motor (NYSE: F) reported Q1 EPS of $0.81, $0.65 better than the analyst estimate of $0.16. Revenue for the quarter came in at $36.2 billion versus the consensus estimate of $32.88 billion.

“Our team is relentlessly executing our plan to turn around our automotive business so that we can create and deliver the high-value, always-on experience that our Ford and Lincoln customers deserve,” said Jim Farley, Ford’s president and CEO. “There’s no question we’re becoming a stronger, more resilient company.”

Guidance:

Lawler said Ford was among the first automakers to identify the potential for a 10% to 20% adverse effect on manufacturing volumes from increasing constraints on global semiconductor supplies entering 2021. In early February, the company said the risk had the potential to reduce Ford’s full-year adjusted EBIT by $1 billion to $2.5 billion.

Ford has updated its 2021 outlook to account for expanded consequences from the semiconductor shortage, made worse by the recent supplier fire in Japan. While the issue is a significant headwind to the company, Lawler said Ford is taking definitive actions to address a range of possible outcomes. Largely because of the additional effect of the supplier fire, Ford now expects to lose about 50% of its planned second-quarter production, up from 17% in the first quarter – again, implying that Q2 will be the trough of the issue.

Ford anticipates the flow of semiconductors from the Japan supplier to resume by the end of the second quarter – but, like many others in the industry, that the broader global semiconductor shortage may not be fully resolved until 2022. The company now assumes that it will lose 10% of planned second-half 2021 production.

All told, Ford now expects to lose about 1.1 million units of production this year to the semiconductor shortage. Accordingly, the company anticipates full-year 2021 adjusted EBIT to be between $5.5 billion and $6.5 billion, including an adverse effect of about $2.5 billion from the semiconductor issue. Adjusted free cash flow for the full year is projected to be $500 million to $1.5 billion.

For earnings history and earnings-related data on Ford Motor (F) click here.

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