Yahoo Finance Ford Motor Co (F) (Q1 2024) Earnings Call Transcript Highlights: Strategic Moves and Financial ...
Revenue: $43 billion, up 3% year-over-year.
Adjusted EBIT: $2.8 billion with a margin of 6.5%.
Adjusted Free Cash Flow: Usage of $500 million, impacted by inventory levels.
Cash and Liquidity: $25 billion in cash, $43 billion in total liquidity.
Dividend: Regular quarterly dividend declared at $0.15 per share.
Ford Pro Revenue: Increased 36%, EBIT more than doubled to $3 billion.
Ford Model e: Loss of $1.3 billion, with significant pricing pressure.
Ford Blue: Revenue, wholesales, and EBIT down due to F-150 production ramp.
Ford Credit EBT: $326 million, with improved financing margin and strong credit performance.
Full Year Adjusted EBIT Outlook: Expected to be $10 billion to $12 billion, tracking toward the high end.
Adjusted Free Cash Flow Guidance: Raised to $6.5 billion to $7.5 billion.
Capital Expenditure (CapEx) Guidance: Tightened to $8 billion to $9 billion, potentially at the lower end.
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you confirm that Ford does not disclose penalties or ZEV credit purchases for clean air regulation? A: John T. Lawler, VP & CFO of Ford, clarified that while it's not an option for Ford not to comply with ZEV or greenhouse gas emissions requirements, they do disclose when they contract to buy credits from another OEM, as noted in their annual 10-K report.
Q: With Ford Pro performing strongly, why does the market value Ford as one of the lowest multiple companies in the world? A: James Duncan Farley, President, CEO & Director, acknowledged the challenge and emphasized the need for Ford to demonstrate a sustainably profitable EV business and transparency in their operations, which he believes will correct the undervaluation over time.
Q: As the market shifts towards hybrids, what is Ford's capacity to ramp up production in this area? A: James Duncan Farley explained that Ford made strategic decisions years ago to increase hybrid capacity, particularly for the F-150, and is now positioned to expand hybrid offerings across its vehicle lineup, leveraging existing powertrains and making modest investments in capacity and engineering.
Q: Can you discuss the trajectory of losses in Model e and the potential to reduce structural costs? A: John T. Lawler stated that Ford is intensely focused on reducing costs in Model e, noting significant cost reductions in vehicles like the Mach-E. However, revenue reductions have outpaced cost savings, and they continue to adjust the cost structure for future vehicle generations to improve profitability.
Q: How is Ford handling the launch of new models in terms of quality and volume? A: James Duncan Farley highlighted Ford's new approach to vehicle launches, which involves more rigorous testing and problem-solving to enhance quality. This method may affect the timing of revenue recognition but is expected to benefit long-term performance and customer satisfaction.
Q: What is the expected impact of raw material cost reductions on Ford's EV production costs? A: John T. Lawler acknowledged the benefit of decreasing raw material costs, such as lithium, but emphasized that the most significant cost reductions would come from transitioning to new battery chemistries that use less expensive materials.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
