Ford Q3 Profits: Profit Drops 24% to $ 1.8 Billion, Raises Full-Year Forecast
DETROIT – Ford Motor Co. on Wednesday said third-quarter net profit fell 24% to $ 1.8 billion due to the continued shortage of microchips, but strong demand has pushed the automaker to raise to $ 1.8 billion. again its forecast for the full year and reinstate a quarterly cash dividend.
Ford reported adjusted earnings of $ 3 billion before interest and taxes, down from $ 3.6 billion in the same period a year ago.
Revenue fell 4.8% to $ 35.7 billion.
Still, the automaker raised its guidance for the full year to adjusted EBIT of $ 10.5 billion to $ 11.5 billion, from a previous range of $ 9 billion to $ 10 billion. The new forecast is nearly double the $ 5.5 billion to $ 6.5 billion Ford forecast at the start of the chip crisis.
âThis is really proof that we are gaining traction with our Ford + plan,â CFO John Lawler told reporters. “The results show the underlying strength of our business.”
The automaker started the quarter with between 60,000 and 70,000 unfinished vehicles awaiting chips and related components. Lawler said he ended the quarter with 27,000 partially built vehicles and that number is expected to drop below 5,000 by the end of the year.
Ford said on Wednesday that improved semiconductor supplies had increased regional product shipments by 67% from the second quarter.
Ford expects fourth quarter volume to increase by about 10% from the third quarter. Still, Lawler said the chip shortage will remain fluid until 2022 and “could extend into 2023, but we expect the scope and severity to diminish.”
In North America, Ford posted pre-tax profit of $ 2.4 billion, down 24% from the previous year. It posted a 10.1% profit margin in the region, and Lawler said Ford was on track to meet its 10% margin target for the full year by 2023.
Ford lost money in Europe and China, but posted profits in South America and its international markets group.
Ford suspended its dividend in March 2020, at the start of the coronavirus pandemic. He said a 10-cent dividend would be paid to shareholders on December 1. Lawler said it would cost the company $ 400 million but would not affect its ability to fund its future growth plans.
“We are not limited in capital,” he said. âWhat this reflects is the strength of our business. We can fund all of our growth initiatives.
Ford shares gained 4.3% to $ 16.17 after-market.