Ford Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $0.89 $0.20
Revenue Beat $36.2B $34.9B
Total U.S. Truck Sales N/A 277,233 trucks N/A

Source: Predictions based on analysts' consensus from Visible Alpha

Key Takeaways

  • Ford's total U.S. truck unit sales grew by 5.1% year-over-year, while total vehicle unit sales rose by 1%.
  • Truck sales have been a growing percentage of total unit sales, now 53.2%, raising the average profit margin per vehicle sold.
  • Adjusted EPS beat estimates by a wide margin, coming in at more than four times consensus estimates, while revenues were also better than expected.
  • Due to the ongoing chip shortage which was exacerbated by a fire at one of Ford's chip suppliers, guidance for the rest of the year, especially Q2, was less rosy.

Ford (F) Financial Results: Analysis

Ford Motor Company (F) reported Q1 2021 earnings that beat analysts' estimates by significant margins on both earnings and revenues. Ford's adjusted earnings per share (EPS) were $0.89, more than four times the consensus estimate of $0.20. Revenue was $36.2 billion, 3.7% better than the consensus estimate of $34.9 billion.

Ford Key Metric: Total U.S. Truck Sales

A key metric for Ford is total U.S. truck sales, both because trucks have become increasingly popular among consumers, and trucks are higher-margin items than cars. In the U.S. in Q1 2021, Ford sold 277,233 trucks, 216,899 SUVs, and 27,202 cars. Total vehicle unit sales were up by 1.0% year-over-year, with trucks up by 5.1%, SUVs up by 14.3%, and cars down by 56.7%. Analysts had predicted fewer overall sales for the quarter.

Ford Production Slowdowns, Guidance, and Stock Performance

Ford previously announced that it has been forced to implement temporary halts to truck production as the result of a global shortage of computer chips. The company now estimates that these production slowdowns in the first half of 2021 could reduce earnings before interest and taxes (EBIT) for the year by roughly $2.5 billion.

Ford expects to produce 1.1 million fewer "units of production," this year as a result of the semiconductor supply issue. The company projects its full year adjusted EBIT to be between $5.5 billion and $6.5 billion, after deducting the projected $2.5 billion negative impact from the semiconductor issue.

Over the past year, Ford's shares have provided a total return of 144.2%, above the S&P 500's total return of 43.6%.

Ford (F) Earnings Call Recap

In its Q1 2021 earnings presentation, Ford offered several "Perspectives on 2021," including these observations:

  • Ford expects Q1 to be the best this year by adjusted EBIT.
  • In Q2, Ford expects to post a loss and significant negative adjusted free cash flow (FCF) due to the fire at Renesas, a major chip supplier in Japan.
  • The losses assume that its production will be roughly half of what it had planned for Q2, and 10% lower in the second half of the year.
  • It expects to recover its Q2 losses and negative FCF in the second half of 2021.
  • The global semiconductor shortage may last into 2022.
  • Ford management highlighted the unlikelihood of future sales volume being lost to COVID-related shutdowns, gains from its investment in electric-car maker Rivian, and strong vehicle demand as positives for Ford in 2021.
  • Rising commodity prices are likely to be the other major challenge for Ford in 2021 besides the chip shortage.

Next Earnings Report

Ford's next earnings report is estimated to be released on July 28, 2021.