Ford posts $561 million second-quarter profit amid chip shortage, high demand

Jordyn Grzelewski
The Detroit News

Ford Motor Co. eked out a $561 million profit in the second quarter amid widespread production disruptions from a lingering global shortage of computer chips complicated by surging demand for its vehicles.

The Blue Oval also is revising upward its outlook for the full year, with executives now projecting adjusted pretax earnings of between $9 billion and $10 billion — a sharp upgrade of earlier guidance. Ford said adjusted free cash flow for the year should total between $4 billion and $5 billion.

In this Sunday, April 5, 2020, photograph, the blue oval sign stands over a Ford dealership in Denver.

The Dearborn automaker reported second-quarter revenue of $26.8 billion, up 38% over the same period last year, when the auto industry was just beginning to mount a recovery from the early days of the coronavirus pandemic. The company's adjusted earnings before interest and taxes, meanwhile, came in at $1.1 billion for the April-June period.

In a statement accompanying the financial results, CEO Jim Farley highlighted the company's newly-announced growth plan, dubbed Ford+: “Ford+ is about creating distinctive products and services, always-on customer relationships and user experiences that keep improving.

"And it’s already happening — there are great examples everywhere you turn at Ford, and the benefits for our customers and company will really stack up over time.”

In North America, the Blue Oval's largest and most lucrative market, Ford reported $194 million in pretax profit for a margin of 1.3%. It posted losses in South America, Europe and China. Its international markets group, which includes dozens of countries around the world, posted $204 million in pretax profit

Meanwhile, the automaker said its operating results for the quarter turned out better than executives had expected in April, when they estimated the company could lose 50% of its planned production volume in the second quarter due to the chip shortage.

In a news release, the company attributed that to strong demand, allowing them to "optimize revenue and profits through lower incentives and a favorable mix of vehicles."

jgrzelewski@detroitnews.com

Twitter: @JGrzelewski