There’s been a lot of earnings drama in recent days, including the massive stock price dips seen from companies like PayPal and Meta/Facebook. Amidst all of this, Ford (NYSE: F) recently reported its own Q4 results with were a bit below expectations, although these results were somewhat overshadowed by everything else going on in earnings news.
The car company reported a strong fourth quarter and also issued an upbeat forecast for the coming year. Considering the auto industry has seen two years of instability thanks to pandemic-related issues, Ford’s optimistic guidance could be a sign the industry is returning back to normal.
The company reported a full-year net income of $17.9 billion, although a lot of that’s due to special items booked during the fourth quarter. That includes an $8.2 billion paper gain from its investment in the electric vehicle company Rivian Auto, a company that also was backed by Amazon. Even with these special gains, that’s a lot better than the $1.3 billion net loss the company saw for the previous year.
Ford also said it expects deliveries to increase by 10-15% while forecasting pre-tax profits to rise by 15-25% as well. Full-year guidance for 2022 is around $11.5 billion to $12.5 billion. While that’s smaller this 2021, but’s still a lot of growth when factoring out the gains made by Ford’s investment in Rivian.
“We’re bullish on 2022, even with persistent supply chain uncertainties that again illustrates the growing strength of our underlying business,” said Ford CFO Tom Lawler during its analyst call on Thursday.
However, while these results were decent enough, they fell a bit short of Wall Street’s expectations. Both revenue and earnings per share came in lower than what most analysts were hoping to see. Additionally, while Ford hit its annual earnings guidance for 2021, it did fall short of its production targets due to supply chain issues. However, supply issues should steadily improve throughout the year, so it likely won’t be a problem for much longer.
Ford recently announced that it would be doubling its electric vehicle production within the next few years as well. While it’s not just Ford doubling down on the EV sector, this is the kind of news the investors love to hear about, given the success of Tesla and the general EV excitement going on. However, Ford’s EV’s aren’t going to be available until much later, starting with its pickup truck.
Shares of Ford were down around 4.5% on the news, with Friday’s pre-market trading down another 5.2%. Overall, investors have been especially reactive when it comes to earnings news. There’s this expectation that growth stocks are going to suffer in the coming high-interest environment, and this underlying concern is making the markets more jittery than normal.
Ford Company Profile
Ford Motor Co. manufactures automobiles under its Ford and Lincoln brands. The company has about 14% market share in the United States and about 7% share in Europe. Sales in North America and Europe made up 69% and 19.5% of 2020 auto revenue, respectively. Ford has about 186,000 employees, including about 58,000 UAW employees, and is based in Dearborn, Michigan. – Warrior Trading News
