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Important points
- Ford reported adjusted earnings of 29 cents per share, more than double analyst estimates, and expected 2024 profits to be at the high end of expectations.
- Ford also announced that it will pay a special dividend of 18 cents per share in the first quarter.
- Losses in the company’s electric vehicle business continue to widen and are expected to widen further in 2024.
- Ford shares rose more than 6% in after-hours trading.
Ford (F) stock rose on Tuesday after the company reported better-than-expected fourth-quarter profits, predicted strong earnings in 2024 and announced plans to return more cash to shareholders. Shares rose more than 6% in after-hours trading.
Ford’s earnings per share were 29 cents, down from 51 cents a share in the year-ago period, but more than double what analysts expected. Fourth-quarter sales rose 4% to $46 billion, also exceeding expectations.
Ford expects adjusted earnings before interest and taxes to be $10 billion to $12 billion in 2024, compared to $10.4 billion in 2023. These estimates represent the high end of the $10 billion to $10.5 billion the company predicted in November. Six-week strike by the United Auto Workers union.
The company expects its Ford Blue division, which consists of gasoline and hybrid vehicles, to earn between $8 billion and $9 billion this year. The company expects profits of between $7 billion and $7.5 billion for the Ford Pro Commercial business.
But the company said its smaller Ford Model e electric vehicle business would likely post a loss of $5 billion to $5.5 billion as pricing pressures in the EV market continue to weigh on profitability. Ta. Losses at Ford’s investment-intensive electric vehicle division have increased steadily over the past year, totaling $4.7 billion in 2023.
Ford noted in a press release that “mainstream customer adoption of EVs is proceeding at a slower pace than industry expectations,” adding that the company “continues to move forward with EV adoption until warranted by demand and acceptable prospects.” “We are postponing certain capital investments.” Return value. ”
Nevertheless, Ford is developing a next-generation electric vehicle and expects to be profitable within a year of its launch, according to Chief Financial Officer John Lawler. “EVs are here to stay, customer adoption is growing, and the long-term turnaround for EVs is central to Ford.”
Ford also announced a first-quarter regular dividend of 15 cents per share and an additional dividend of 18 cents to be paid on March 1. The company said it aims to distribute 40% to 50% of its adjusted free cash flow to shareholders. The automaker expects it to be between $6 billion and $7 billion in 2024.
Ford shares rose 6.3% to $12.83 in after-hours trading. Through Tuesday’s close, the stock had fallen about 10% over the past year.
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