Ford F exceeded expectations by reporting adjusted earnings of 29 cents per share for the fourth quarter of 2023, surpassing the Zacks Consensus Estimate of 12 cents. However, this figure decreased from the 51 cents recorded in the year-ago quarter. The company’s consolidated fourth-quarter revenues amounted to $43.3 billion, beating the Zacks Consensus Estimate of $37.96 billion and marking a 4% increase year over year.
Analysis of Segmental Performance
The U.S. legacy automaker divides its automotive results into three business segments — Ford Model e, Ford Blue, and Ford Pro. Ford Blue is focused on the firm’s traditional gas-powered business, Ford Model e on EVs and advanced technologies, and Ford Pro on commercial vehicles and services. In the fourth quarter, total wholesale volume in the Ford Blue segment remained constant year over year at 758,000 units, exceeding the expected 641,000 units. Additionally, revenues from the segment remained steady year over year at $26.2 billion but surpassed estimates of $22.3 billion. Earnings before interest and taxes were recorded at $813 million, with an EBIT margin of 3.1%, exceeding projections of $743.7 million.
Total wholesale volume in the Ford Model e segment increased by 14% year over year to 34,000 units, outperforming estimates of 28,000 units. Revenues from the segment rose by 2% year over year to $1.6 billion, surpassing the estimated $1.35 billion. However, the loss before interest and taxes widened to $1.57 billion, with an EBIT margin of negative 98.2%.
Total wholesale volume in the Ford Pro segment rose by 1% year over year to 361,000 units, surpassing the predicted 280,000 units. Revenues from the segment grew by 11% year over year to $15.4 billion, exceeding the expected $12.86 billion. Earnings before interest and taxes were reported at $1.81 billion, with an EBIT margin of 11.8%, surpassing the projection of $1.08 billion. With a total of approximately $43.2 billion in automotive revenues, Ford exceeded the estimated $36.5 billion due to the better-than-expected performance of Ford Blue, Ford Model e, and Ford Pro.
Financial Overview
Ford disclosed an adjusted free cash flow of $1.96 billion for the quarter and had $24.86 billion in cash and cash equivalents as of December 31, 2023. Long-term debt, excluding Ford Credit, stood at $19.2 billion at the end of the fourth quarter of 2023. Ford declared its regular first-quarter 2024 dividend of 5 cents per share and a supplemental dividend of 18 cents per share, payable on March 1, 2024, to shareholders of record as of February 16, 2024.
Outlook for 2024
For the full year 2024, Ford anticipates adjusted EBIT in the range of $10-$12 billion, with adjusted free cash flow estimated between $6-$7 billion, and capital spending expected to range between $8 billion and $9.5 billion.
Expert Analysis and Projections
Ford currently holds a Zacks Rank #3 (Hold). Some better-ranked players in the auto space are Honda Motor Co., Ltd. HMC, Oshkosh Corporation OSK, and Modine Manufacturing Company MOD, each with a Zacks Rank #1 (Strong Buy) at present. Analysis of HMC’s 2024 sales and earnings suggests year-over-year growth of 14.8% and 37.3%, respectively, with EPS estimates for 2024 and 2025 showing improvements. Similarly, OSK’s 2024 sales and earnings are projected to grow by 6.7% and 4%, with positive changes in EPS estimates for 2024 and 2025. MOD’s 2024 sales and earnings are expected to increase by 4% and 67.2%, with improvements in EPS estimates for 2024 and 2025.
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