Ford 3Q profit down 25% from 2020 on continuing chips woes
Ford Motor Co. on Wednesday reported third-quarter profit of $1.8 billion, a 25% decline from the same period last year.
The Dearborn automaker generated $1.8 billion of net income on revenue of $35.7 billion, a roughly 5% drop from revenue of $37.5 billion in the third quarter last year. The company's profit margin for the quarter was 5.1%.
Meanwhile, adjusted earnings before interest and taxes came in at $3 billion for the quarter, down from $3.7 billion in the third quarter of 2020.
Despite results coming in below the year-ago period, Ford executives highlighted improvements from the second quarter of this year. Revenue, net income, adjusted earnings before interest and taxes, cash flow from operations and adjusted free cashflow were "sharply higher" from the second quarter, the company said in a news release, "driven by significant increases in semiconductor availability and wholesale vehicle shipments from Q2."
Though the availability of computer chips "remains a challenge," the supply situation has "markedly improved from the second quarter, propelling sequential increases in wholesale shipments and revenue of 32% and 33%, respectively," the company said.
In North America, the automaker generated $2.4 billion in adjusted earnings and hit an EBIT margin of 10.1%. The improvement in chip supplies in Ford's largest market helped boost product shipments 67% from Q2 to Q3.
The automaker posted EBIT losses in Europe and China.
“This is the most exciting Ford lineup I’ve seen, but what matters is that customers love our new products and services and we’re just getting started,” Ford CEO Jim Farley said in a statement. “The trajectory of our business gives us huge confidence in Ford+, and we’re obsessively turning the plan’s promise into reality."
Meanwhile, Chief Financial Officer John Lawler said the company expects to invest between $40 billion and $45 billion in strategic capital expenditures between 2020 and 2025, including half of the $30 billion it plans to spend exclusively on battery electric vehicles during that period.
Lawler also increased guidance on the company's full-year 2021 adjusted EBIT to between $10.5 billion and $11.5 billion.
Meanwhile, Ford’s board of directors voted to reinstate a regular quarterly dividend starting in the fourth quarter.