Ford Q1 revenues recover as truck and fleet sales drive earnings

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By Webdesk

Ford reported it results first quarter 2023 Tuesday after the bell, and it’s the first time the longtime automaker has broken down revenues into its three new business units: Ford Blue for its iconic gas and hybrid vehicles, Ford Model e for electric vehicles and Ford Pro for commercial products and services.

The automaker reported sales of $41.5 billion, surpassing Wall Street expectations of $36 billion and showing a 20% improvement over the same period last year. Despite pressure from Ford to electrify its fleet, that push was largely driven by sales of commercial vehicles and gas-powered cars.

Ford’s net income on a GAAP basis was $1.8 billion, compared to a net loss of $2 billion through 2022 due to a $7.3 billion write-off on the automaker’s Rivian investment.

On an adjusted earnings basis, Ford earned $3.4 billion, up 45% from the first quarter of 2022 and a margin of 8.1%.

Ford’s full-year outlook remained the same at between $9 billion and $11 billion in adjusted revenue. The company expects to have adjusted free cash flow of approximately $6 billion by 2023.

By segment, Ford expects Ford Blue to bring in $7 billion by 2023, up slightly from last year; an annual loss of about $3 billion for Model e; and EBIT of approximately $6 billion for Pro, which would represent a double profit for 2022.

Ford said operating cash flow for the quarter was $2.8 billion and it generated $693 million in adjusted free cash flow. The automaker ended the quarter with nearly $29 billion in cash.

Breakdown of Ford’s business segments

breakdown of Ford business segments

This is the first quarter that Ford has split revenues across its three business units: Ford Blue, Ford Model e and Ford Pro. Image credit: Ford Motor Co.

Ford is still losing out on its EV business, which it often describes as a “startup.” The unit brought in $700 million in revenue, down 27% from last year, due in part to production stoppages of two of Ford’s most popular electric cars: the F-150 Lightning pickup and the Mustang Mach-E SUV . Ford said production of the Mach-E was interrupted by “industrial changes that will nearly double production capacity,” which may be Ford’s most recent statement. price drop of the vehicle.

That’s the second time Ford has drop the price on the Mach-E this quarter. The first time was in January and followed similar price cuts from Tesla.

Ford aims to sell 600,000 EVs globally by the end of 2023 and more than 2 million by the end of 2026. The automaker will need to build and ship quickly if it wants to achieve that goal. Ford only reported 10,866 EV units sold in Q1 this year.

Despite the losses within the Model e, Ford’s other two units were more than enough to push the automaker into growth territory. Ford said its Ford Blue and Ford Pro business segments were both profitable in every region in which they operate. The automaker shipped 1.1 million vehicles in the quarter, up 9% year-over-year, with the majority of sales coming from Ford’s gas-powered, hybrid and electric trucks, vans and SUVs, the company said.

For the first quarter, Ford Blue posted sales of $25.1 billion, up 21% year-over-year. On an adjusted basis, that’s $2.6 billion. The automaker says it expects to continue to see strong growth in this segment.

Ford Pro reported $13.2 billion, up 28% from last year. In EBIT terms, it reports $1.4 billion, which is 3x from 2022. That growth was driven by sales of Ford’s Transit and E-Transit vans as well as a 64% increase in paid software subscriptions in the first quarter.

The automaker’s pre-tax credit income was $303 million, which is lower than last year due to a lower financing margin, increased loan losses and a decline in lease income, Ford said.

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