Ford (F) Q3 2022 earnings results

Ford (F) released its third-quarter 2022 earnings report after the stock market close today. The automaker has been battling supply chain bottlenecks all yr, warning investors of a success to its bottom line last month.

In response to the automaker’s release, Ford beat Q3 2022 revenue as its electric vehicles proceed gaining momentum. As well as, the corporate says it should be transferring its self-driving tech interests internally after a big loss on its Argo AI investment.

Ford Q3 2022 earnings preview

Earlier today, we released a preview of Ford’s third-quarter earnings, including what you’ll be able to expect from Wall St analysts.

Ford forecasted Q3 operating profit between $1.4 billion to $1.7 billion, despite Wall St expectations of around $1.8 billion.

In response to estimates, Ford is predicted to post rising revenue from last yr, between $36 billion and $37 billion. As mentioned in the sooner post, a couple of things to look out for are comments on Ford’s Rivian stake (almost 10%), full-year guidance, and electric vehicle targets.

Up until now, ford has stuck with its guidance for 2022 despite an expected $1 billion hit in additional supply chain costs.

Ford Q3 2022 financial results and evaluation

Just after the market close, Ford reported it had exceeded Wall St revenue expectations despite lingering supply chain issues.

Ford’s revenue got here in at $39.4 billion, up 10% from last yr. Operating profit of $1.8 million was consistent with Wall St. forecasts and above Ford’s recent guidance.

Meanwhile, Ford achieved strong operating money flow of $3.8 billion in Q3. Adjusted free money flow of $3.6 billion is pushing the automaker’s FY guidance to between $9.5 billion to $10 billion.

The automaker believes the third quarter set the corporate up for a solid finish to the yr and anticipates 2022 operating profit of around $11.5 billion, up about 15% from previous forecasts.

To achieve this, Ford says, it should take about 10% YOY growth in wholesale shipments.

Despite this, Ford posted a net lack of $827 million attributable to a $2.7 billion loss on its Argo AI investment (more on this below).

Ford’s Q3 2022 earnings results were influenced by two things, in line with the automaker:

1. Supply shortages leading to around 40,000 vehicles sitting in inventory awaiting parts
2. The next-than-expected supplier payment of around $1 billion

The corporate ended the quarter with $32 billion in money and $49 billion in liquidity.

Ford’s Q3 electric vehicle progress

Ford says it’s on the “cusp” of an evolution in electric vehicles and that orders proceed to grow substantially with unprecedented demand for EVs.

• Ford remained the #2 EV brand in the US through Q3 2022, behind only Tesla. The automaker says it’s still heading in the right direction to fulfill its 600,000 EV run rate by the top of 2023 and a pair of million by 2026.
• In Q3, Ford also set latest US dealership requirements for dealers to spice up electric vehicle deployment.
• Ford broke ground at its BlueOval City in Tennessee, a focus in Ford’s EV plans which is slated to open in 2025.
• The corporate will add shifts to spice up the Mustang Mach-E production capability while continuing to scale E-Transit production.
• In Europe, where Ford has led the industrial segment for seven years, Ford revealed the E-Transit custom.
• To satisfy these targets, Ford continues securing raw materials and battery capability.
• Ford’s investments in Rivian remained under $1 billion within the third quarter.

Ford expects climate initiatives in the US to spice up demand while offsetting its investments to speed up EV production capabilities. The automaker says it believes it should meet the necessities for certain Mach-E and F-150 lighting models to receive the federal EV tax credit.

Ford shifts self-driving tech plans internally

During Q3, Ford decided to shift its spending on L4 advanced driver assistance systems being developed by Argo AI to deal with the interior development of L2/L3 technology.

As Argo has didn’t attract investors, Ford has posted a considerable loss ($2.7 billion pretax) on its investment in the corporate. When Ford first invested in Argo, it planned to introduce L4 technology by 2021. Nonetheless, as Ford’s CEO, Jim Farley, states:

But things have modified, and there’s an enormous opportunity at once for Ford to provide time – the
most dear commodity in modern life – back to hundreds of thousands of shoppers while they’re of their
vehicles.

Before adding:

It’s mission-critical for Ford to develop great and differentiated L2+ and L3 applications that at the identical time make transportation even safer.

Ford’s chief also mentioned they might hire talented engineers from Argo as the corporate dissolves to speed up internal development. The corporate says the choice comes because it sees rising interest and margins in other segments, resembling Ford Pro and electric vehicles. Although the corporate will not be capital constrained, it should use the investments to drive strategic growth in these areas.

Other observations from Ford’s third-quarter results

• Ford’s auto market share grew in North America to 12.8% (+1.7% YOY) and in Europe to six.6% (up 0.4% YOY).
• In China, Ford’s market share dropped 0.5% YOY to 2%. The corporate also noted a quarterly loss attributable to investments in electric vehicles within the region.
• Ford Pro, the automaker’s portfolio of business services and products, continues gaining momentum, with the corporate’s electric industrial van, the E-Transit holding a solid lead in full-size industrial trucks and vans in the US (90%) and Europe.
• Starting next yr, Ford will report in three business segments, including Ford Model e (for electric vehicles), Ford Pro (its business services), and Ford Blue (ICE vehicles) as the corporate gets able to speed up EV sales.