Ford F saw a glimmer of hope in its first-quarter 2024 earnings report, with adjusted earnings per share (EPS) coming in above expectations at 49 cents. Although this figure was a decline from the year-ago quarter, investors took heart as it surpassed the Zacks Consensus Estimate of 42 cents. The company’s revenues for the quarter landed at $42.8 billion, showing a 3.1% increase compared to the same period last year.
Putting Segments Under the Microscope
In a detailed breakdown, the data revealed a varied performance across Ford’s segments. The Ford Blue segment saw a decline in both total wholesale volume and revenues, falling short of estimates. On the other hand, the Ford Model e and Ford Pro segments experienced contrasting fates. While the former witnessed a decrease in volume and revenue, the latter celebrated growth that outstripped projections. Overall, the discrepancies across segments culminated in total automotive revenues slightly missing estimates.
Meanwhile, the Ford Credit unit boasted a 20.9% year-over-year revenue increase, outperforming expectations. The unit’s pretax earnings also jumped from the previous year’s figures, painting a positive picture.
Shoring Up the Financial Component
Despite the earnings beat, Ford reported a negative adjusted free cash flow for Q1. However, the company held a substantial cash reserve of $19.72 billion as of March 31, 2024. Long-term debt, excluding Ford Credit, stood at $19.4 billion at the close of the quarter.
The announcement of a regular dividend for the second quarter, set at 15 cents per share, provided investors with some reassurance. This dividend is scheduled to be paid on June 3, 2024.
Revamping the Outlook for Investors
Looking ahead to the rest of 2024, Ford revised its guidance in a bid to instill confidence in investors. While the adjusted EBIT outlook remained steady at $10-$12 billion, expectations for adjusted free cash flow were enhanced to $6.5-$7.5 billion. The capital spending estimate was also narrowed to $8-$9 billion, indicating a potential streamlining of expenses.
Analyst Insights and Recommendations
Analysts have placed Ford at a Zacks Rank #3 (Hold), reflecting a cautious stance on the stock. In contrast, other players in the auto industry such as Geely Automobile Holdings Limited GELYY, Allison Transmission Holdings, Inc. ALSN, and Canoo Inc. GOEV have garnered a Zacks Rank #1 (Strong Buy). These contrasting rankings suggest a diversified landscape within the automotive sector, offering investors a range of opportunities.
The data further reveals promising growth prospects for different companies within the industry, indicating potential investment avenues for those seeking to capitalize on emerging trends.