Ford Raises Profit Forecast Despite Steeper EV Losses

Ford Motor delivered healthy profits for the second quarter and raised its profit outlook for the full year, the latest sign that the car business continues to defy Wall Street’s gloomy forecasts heading into the year.

At the same time, Ford warned Thursday of steeper-than-expected losses in its electric-vehicle business, which has been buffeted by stiff price competition in some parts of the EV market. Ford now expects its EV division to lose $4.5 billion this year, up from an earlier forecast of $3 billion.

“The pricing pressure has dramatically increased in the last 60 days,” Ford Chief Executive Jim Farley told analysts. 

In the April-to-June period, strong sales of pickups, especially among businesses and other commercial customers, helped the Dearborn, Mich. auto maker’s bottom line.  

Ford shares fell about 2% in aftermarket trading.

How was Ford’s quarter?

• Net income nearly tripled, to $1.9 billion.
• Pretax profit, excluding one-time items: $3.8 billion, up about 2% from a year earlier.
• Pretax earnings per share: 72 cents per share, easily surpassing the analysts’ average forecast of 54 cents per share, according to FactSet.
• Revenue rose 12% to $45 billion.
• In its EV division, Ford lost about $1.1 billion, widening from its roughly $700 million loss last quarter.

Ford said it expects the losses on electrics to be offset by better-than-expected profits from its two other divisions: the traditional internal-combustion-engine business; and Ford Pro, which sells trucks and other vehicles to commercial customers. 

The automaker also pushed back its EV production goals, saying it will now produce 600,000 EVs annually by the end of 2024, backing off from a previous timeline of doing so by the end of this year. Also, Ford previously said it would produce 2 million EVs by the end of 2026, but on Thursday declined to provide a time frame for meeting that goal. 

“We expect the EV market to remain volatile until the winners and losers shake out,” Farley added.

Ford raised its annual pretax-profit guidance to $11 billion to $12 billion, up from its previous projection of $9 billion to $11 billion. Rival General Motors also reported strong results for the quarter earlier this week and raised its full-year profit forecast for the second time this year, citing stronger-than-expected consumer demand, executives said.

The automaker also pointed to an uncertain global economy, increased warranty costs and pending contract talks with the United Auto Workers as potential stumbling blocks.

Ford, GM and Jeep maker Stellantis are in early talks with the United Auto Workers over a new four-year labor agreement, ahead of the Sept. 14 expiration of the current contract. Union leaders have signaled their willingness to strike one or more automakers, which has the potential to sap billions of dollars from their bottom lines. 

This round of negotiations is shaping up to be more combative than others in recent years. Newly-elected union president Shawn Fain has signaled that he will take a hard line with the auto companies and warned members to be prepared for a strike.

“We all know there’s been a lot of activity in labor outside the industry,” Ford Finance Chief

As the three automakers reported strong profits this week, UAW officials have seized on the results, claiming that they point to the need for workers to get a better deal in the new contract.

Write to Nora Eckert at [email protected]