Ford Q3 2021 Earnings Report Recap

F beat on earnings but missed on revenue

Key Takeaways

  • Ford missed analysts' expectations for the number of vehicles sold in its North American region.
  • North America is Ford's largest and most profitable market, making vehicle sales from that region a key indicator of the company's overall success.
  • Ford said that the supply of semiconductors improved compared to the second quarter.
  • The company said it reinstated a regular quarterly dividend that would begin in Q4 FY 2021.
Ford Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $0.51 $0.26
Revenue Miss $35.7B $36.6B
North American Vehicles Sold Miss 546K 568.5K

Source: Predictions based on analysts' consensus from Visible Alpha

Ford (F) Financial Results: Analysis

Ford Motor Company (F) reported mixed Q3 FY 2021 earnings results. Adjusted earnings per share (EPS) surpassed analysts' expectations by a wide margin, nearly doubling their estimates. Adjusted EPS was down 21.5% compared to the year-ago quarter. Revenue missed consensus estimates, down 4.8% year over year (YOY). Ford's North American vehicle sales also missed analyst forecasts for the quarter.

The company's shares rose as much as 6% in extended trading. Over the past year, Ford's shares have provided a total return of 95.8%, well above the S&P 500's total return of 34.2%.

F North American Car Sales

Ford sold approximately 546,000 vehicles in its North American region during the quarter, down 16.1% from the year-ago quarter. The North American market is Ford's largest and most profitable. Demand for automobiles in North America has surged as the region has emerged from the worst of the COVID-19 pandemic.

However, the auto industry has faced significant supply chain challenges, most notably a global shortage of semiconductor chips, which are increasingly used in motor vehicles. Ford and many other automakers have had to halt or delay production at certain times due to the shortage as the try to keep up with the pace of demand. Because North America is Ford's primary market, the company's success at matching vehicle demand in this area is a strong indicator of its overall capacity as the broader economy continues to recover from the pandemic.

Ford noted in its third quarter earnings press release that it saw improvement in the supply of semiconductors in North America. That improvement helped raise regional product shipments by 67% compared to the second quarter. President and CEO Jim Farley said that growth for the North American region is "spring loaded" as semiconductor volumes expand.

F Dividend Reinstatement

Ford announced that its board of directors approved to reinstate a regularly quarterly dividend beginning in the fourth quarter. The quarterly dividend of $0.10 per share on outstanding common stock of Class B shares will be paid on Dec. 1, 2021, to shareholders of record as of the close of business on Nov. 19, 2021.

F Guidance

Ford raised its guidance for full-year FY 2021 adjusted EBIT to between $10.5 billion and $11.5 billion based on management's confidence in the company's underlying strength. But it maintained its previous guidance for adjusted free cash flow of between $4.0 billion and $5.0 billion.

Ford's next earnings report (for Q4 FY 2021) is estimated to be released on Feb. 3, 2022.

Article Sources

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