Ford Motor Company's Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2024
Ford Motor Co’s Q1 2024 financial report reveals a strong performance, with increased revenue and profits driven by higher vehicle sales and improved operational efficiency. The company’s focus on electric vehicles and autonomous driving technology is expected to continue driving growth in the coming quarters.
Overview
Ford reported first quarter 2024 net income of $1.3 billion, down from $1.8 billion in first quarter 2023. Revenue was $42.8 billion, up 3% from a year ago. The company had positive operating cash flow of $1.4 billion but negative adjusted free cash flow of $0.5 billion as higher inventory and capital spending outpaced earnings.
Ford Credit contributed $0.3 billion to earnings, similar to a year ago. Ford expects full year adjusted earnings of $10-12 billion and adjusted free cash flow of $6.5-7.5 billion.
Revenue and Profit Trends
The 3% revenue increase was driven by Ford Pro commercial vehicles, up 36%, offsetting declines in Ford Blue (down 13%) and Ford Model e (down 84%). By region, North America was down 5% but Europe, China, and South America were up.
Earnings decreased 24% as lower volume, pricing pressure, and inflationary costs weighed on margins. Price increases and cost cuts are planned for 2024 to counter these headwinds.
Higher capital spending for new products and inventory build led cash flow to turn negative. Working capital was impacted by production timing, while pension contributions and one-time payments also affected cash.
Segment Analysis
Ford Blue earnings fell 63% on lower F-150 volume during model changeover. Unfavorable mix and pricing pressure also contributed despite higher South America pricing. Margin declined from 10.4% to 4.2%.
Ford Model e loss widened on lower volume and severe price competition in electric vehicles. Margin worsened from -102% to -1146%. New products are expected in 2024-2025.
Ford Pro earnings more than doubled on higher Super Duty and commercial van volume. Pricing gains and positive mix supported margins expanding from 10.3% to 16.7%.
Ford Credit earnings were flat as higher financing margins offset weaker used vehicle values. Credit losses remain low.
Outlook
Ford sees industry volume holding at 2022 levels. Pricing is expected to moderate industrywide. Ford targets $2 billion of cost cuts along with new higher-margin products.
An economic downturn or production disruptions are key risks. Rising interest rates could also affect affordability. Execution of electric vehicle ramp up continues as a challenge.
Overall Ford expects improved profitability and cash flow in 2024 based on cost cuts and new products outweighing inflation and economic uncertainty. The dividend was sustained as financial health remains a priority.
