Ford (F) Q4 2023 earnings

DETROIT — Ford Motor beat Wall Street’s top- and bottom-line expectations for the fourth quarter while forecasting better-than-expected results for 2024.

The company’s full-year forecast calls for adjusted earnings before interest and taxes, or EBIT, of between $10 billion and $12 billion, adjusted free cash flow of $6 billion to $7 billion and capital spending of $8 billion to $9.5 billion.

Analysts had expected Ford’s adjusted earnings guidance to be roughly $9 billion to $11 billion, according to investor notes from several analysts.

The automaker also announced a special dividend of 18 cents per share in addition to a first-quarter regular dividend of 15 cents per share. The dividends are payable March 1 to shareholders of record at the close of business Feb. 16.

Shares of Ford were up roughly 6% during after-hours trading, adding to a 4.1% increase during trading Tuesday to close at $12.07.

Here’s how Ford did during the fourth quarter compared with what Wall Street expected, based on average estimates compiled by LSEG, formerly known as Refinitiv:

• Earnings: 29 cents per share adjusted vs. 14 cents per share adjusted, expected
• Automotive revenue: $43.2 billion vs. $40.12 billion expected

Ford CEO Jim Farley described last year as a “foundational year” for the automaker, specifically calling out several cost improvements, high gross margin on its hands-free BlueCruise highway system as well as hybrid vehicles, which the company expects to increase sales of by 40% this year.

“It was a solid year, but I want to be really clear we are nowhere near our earnings potential for Ford Motor Co.,” Farley told investors Tuesday. “We are really positioned well this year for growth and profitability, for revenues as well.”

For the fourth quarter, Ford reported a net loss of $526 million, or 13 cents per share, compared to a profit of $1.29 billion, or 32 cents per share, during the same period a year earlier. Adjusting for one-time items, the company reported earnings per share of 29 cents.

Overall revenue during the period increased about 4% to $46 billion, up from about $44 billion a year earlier. Adjusted EBIT declined 59% to $1.05 billion from the year-ago period.

Adjusted earnings of Ford’s traditional business, known as Ford Blue, were down about 48% during the fourth quarter compared to a year earlier to $813 million. Its Ford Pro commercial business earned $1.81 billion, up 25% from a year earlier. Ford’s Model e electric vehicle unit posted a $1.57 billion loss from October through December, more than doubling a loss of $631 million during the fourth quarter of 2022.

For the full year 2023, Ford reported $10.42 billion in adjusted EBIT, in line with 2022; revenue of $176.2 billion, up 11% compared to the prior year; and adjusted free cash flow of $6.8 billion, down $2.3 billion from the year earlier. Net income was $4.33 billion, up from a $2.15 billion loss in 2022.

The company’s traditional and fleet businesses assisted in offsetting $4.7 billion in losses for its EV business.

Ford in November lowered its full-year forecast in light of contract negotiations with the United Auto Workers union.

Ford Chief Financial Officer John Lawler said Tuesday that the company continues to look for ways to offset increasing labor costs due to the new UAW contract, which the company said is expected to cost $8.8 billion over the life of the deal, ending in April 2028. Ford has already announced plans to delay or cut spending on several EV products.

“All of our EV teams are ruthlessly focused on cost and efficiency in our EV products because the ultimate competition is going to be the affordable Tesla and the Chinese [automakers]” Farley said.

Ford is expected to face headwinds this year, including lower vehicle prices, warranty costs and continued losses for all-electric vehicles. Bright spots are expected to be its Ford Pro fleet unit and traditional Ford Blue internal combustion engine business.

— CNBC’s Michael Bloom contributed to this report.