Despite Bottlenecks, Ford Posts Quarterly Beat

Ford Motor (NYSE: F) reported stronger-than-expected fiscal Q1 results, topping both earnings and revenue estimates.

The quarterly beat was driven by strong customer demand despite higher pricing, which offset higher costs and inflation, as well as global shortages of semi-conductor chips, which impacted deliveries.

Following the results, shares of the auto giant gained 1.9% in the extended trading session on April 27.

Q1 Beat

The company reported quarterly earnings of $0.38 per share, a cent higher than the analysts’ estimates of $0.37 per share. However, it was much lower than earnings of $0.70 per share reported for the prior-year period.

Revenues declined 5% to $34.5 billion compared to the prior-year period, but outpaced the Street’s estimate of $31.13 billion.

The decline in revenue growth is attributed to a 9% decrease in wholesale shipments to 970,000. 

FY22 and Long Term Outlook

Based on the strong demand and pricing environment for new and existing vehicles, Ford reiterated its full-year guidance for operating earnings.

The company continues to forecast adjusted earnings before interest and tax (EBIT) of $11.5 billion to $12.5 billion, implying 15% to 25% year-over-year growth from 2021, which includes improvement in operations outside North America.

In the longer-term, Ford remains on track to reach a global electric vehicle (EV) manufacturing capacity of at least 600,000 by the end of 2023.

To reach its lofty targets, the company is boosting its battery supplies and is set to produce more than two million EVs per year by the end of 2026.

CEO’s Comments

Sharing his excitement about the attractive vehicle line-up, Ford CEO, Jim Farley, commented, “The appeal of these products—Bronco, Bronco Sport, Maverick, Mustang Mach-E, E-Transit, and now the F-150 Lightning—is undeniable…That’s translating into orders, typically with rich configurations that deliver great experiences to those customers and healthy pricing for us.”

He further added, “Now, we’re breaking constraints wherever they exist to get more Ford vehicles—including our innovative EVs—to more customers as quickly as possible.”

Wall Street’s Take

The consensus among analysts is a Moderate Buy based on six Buys, six Holds and two Sells. The average Ford stock forecast of $20.62 implies an upside potential of 38.86% from current levels. Shares have gained almost 20% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool provided insight into Ford’s Q1 performance well ahead of its earnings.

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Ford’s performance.   According to the tool, the Ford website has recorded year-to-date website growth of 20.22% so far this year.

Furthermore, Ford saw an 8.13% sequential increase to 29.2 million unique visitors to its website in March.

Key Takeaway

To further tap the rising demand, Ford has an attractive line of new vehicles, including the F-150 Lightning electric pickup. It is also on track to deliver 600,000 EV units by late 2023. However, if the bottlenecks persist, further price increases cannot be ruled out.  

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