Ford Exceeds Q4 Earnings Expectations Ford Exceeds Q4 Earnings Expectations

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By Ronald Tech

Ford reported adjusted earnings of 29 cents per share for the fourth quarter of 2023, surpassing the Zacks Consensus Estimate of 12 cents but declining from the year-ago quarter. The company’s consolidated fourth-quarter revenues came in at $46 billion, rising 4.5% year over year.

Segmental Performance

The U.S. legacy automaker reports its automotive results under three business segments — Ford Model e, Ford Blue, and Ford Pro. While Ford Blue focuses on the firm’s legacy gas-powered business, Ford Model e focuses on EVs and advanced technologies, and Ford Pro deals with commercial vehicles and services.

In the fourth quarter, total wholesale volume in the Ford Blue segment remained flat year over year at 758,000 units. Revenues from the segment also remained flat at $26.2 billion. Total wholesale volume in the Ford Model e segment increased by 14% year over year to 34,000 units. Revenues from the segment rose by 2% year over year to $1.6 billion. Total wholesale volume in the Ford Pro segment increased by 1% year over year to 361,000 units. Revenues from the segment grew by 11% year over year to $15.4 billion.

Overall, Ford’s total automotive revenues came in around $43.3 billion, surpassing estimates on the back of stronger-than-expected results from Ford Blue, Ford Model e, and Ford Pro units. Fourth-quarter revenues from the Ford Credit unit were $2.7 billion, up 17.4% year over year.

Financial Position

Ford reported an adjusted free cash flow of $1.96 billion for the quarter. It had cash and cash equivalents of $24.86 billion as of Dec 31, 2023. Long-term debt, excluding Ford Credit, totaled $19.5 billion at the end of the fourth quarter of 2023.

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Ford declared its first-quarter 2024 regular dividend of 5 cents per share and a supplemental dividend of 18 cents per share, payable on Mar 1, 2024, to shareholders of record at the close of business on Feb 16, 2024.

2024 Guidance

For full-year 2024, Ford expects adjusted EBIT in the range of $10-$12 billion. Adjusted free cash flow is estimated in the range of $6-$7 billion. Capital spending is expected between $8 billion and $9.5 billion.

Zacks Rank & Key Picks

F currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the auto space are Honda Motor Co., Ltd., Oshkosh Corporation, and Modine Manufacturing Company, each sporting a Zacks Rank #1 (Strong Buy) at present.

The Zacks Consensus Estimate for HMC’s 2024 sales and earnings implies year-over-year growth of 14.8% and 37.3%, respectively. The EPS estimates for 2024 and 2025 have moved up 16 cents and 22 cents, respectively, in the past 30 days. The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 6.7% and 4%, respectively. The EPS estimates for 2024 and 2025 have improved 2 cents and 25 cents, respectively, in the past seven days. The Zacks Consensus Estimate for MOD’s 2024 sales and earnings suggests year-over-year growth of 4% and 67.2%, respectively. The EPS estimates for 2024 and 2025 have improved 22 cents each in the past seven days.