Ford shares fall on fourth-quarter earnings and 2022 guidance

DETROIT — Ford Motor‘s shares slid after it reported fourth-quarter earnings Thursday that significantly missed Wall Street’s earnings expectations and slightly missed on revenue.

The company’s shares tumbled by more than 6% in after-hours trading. Here’s how Ford performed, compared with analysts’ estimates as compiled by Refinitiv:

• Adjusted EPS: 26 cents vs 45 cents a share expected
• Automotive revenue: $35.3 billion vs $35.5 billion expected

While the automaker hit its annual earnings guidance for 2021, it missed production targets analysts were expecting due to supply chain problems, including an ongoing shortage of semiconductor chips, Ford CFO John Lawler told media during a call Thursday.

For the fourth quarter, Ford’s North American operations, as they have been, contributed the most to the automaker’s earnings, up by 68% to $1.8 billion compared to a year earlier. International losses included $150 million in China, down 130%, and $159 million, a 139% decline, in Europe.

For 2022, Ford estimates it will earn between $11.5 billion and $12.5 billion in adjusted pretax profits, up 15% to 25% over 2021, and generate between $5.5 billion to $6.5 billion in adjusted free cash flow.

“We’re bullish on 2022,” Lawler said, “even with persistent supply chain uncertainties that again illustrates the growing strength of our underlying business.”

The expected increase in earnings comes as constraints of the chip shortage is expected to ease throughout the year. Ford and other automakers were forced to sporadically shutter plants and depleted vehicle inventories due to the lack of chips.

Ford expects vehicle production volumes to increase by 10% to 15%, up from a previous guidance of 10%, according to Lawler.

The automaker said it expects to spend between $7 billion and $8 billion, up from $6.2 billion in 2021, as Ford accelerates its transition to electric vehicles. That includes launches of electric versions of the Transit cargo van and F-150 pickup.

The automaker reported an operating profit of $1.7 billion, or adjusted earnings of 34 cents per share, and revenue of $33.2 billion in the fourth quarter of 2020. On an unadjusted basis, Ford lost $2.79 billion during that time frame.

Analysts estimate Ford this year will earn between $1.54 and $2.35 per share on revenue of $147.5 billion, according to Refinitiv.

Ford sold 1.9 million vehicles in the U.S. in 2021, down by 6.8% as it managed through a global shortage of semiconductor chips. The parts problem forced Ford and other automakers to sporadically shutter plants and depleted vehicle inventories.

After increasing by roughly 140% in 2021, shares of Ford are down by about 4% this year.

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