Ford Provides Guidance for Full-Year 2023 Operating Results; CFO Lawler Today Will Reiterate Ford+ is ‘Right Strategy to Win’
November 30 2023 - 5:45AM
Business Wire
- After withdrawing guidance amid UAW strike, Ford now expects
full-year adjusted EBIT of $10.0 billion to $10.5 billion, adjusted
free cash flow of between $5.0 billion and $5.5 billion
- Though affected U.S. operations have been restarted, guidance
reflects effects of strike-related manufacturing disruptions on
wholesales and revenue
- At Barclays event today, John Lawler will describe underlying
business strength, show how customer-centered Ford+ plan and
talented team are creating more vibrancy, less cyclicality
Ford has a new, post-strike outlook for full-year 2023 operating
results – and absolute confidence in and commitment to the
long-term potential of its Ford+ plan to generate growth and
value.
Those are the primary messages that Ford CFO John Lawler will
deliver in remarks this morning at the Barclays Global Automotive
and Mobility Tech Conference. Lawler is scheduled to speak at 10:10
a.m. ET in a session hosted by Barclays analyst Dan Levy.
Ford withdrew 2023 financial guidance in late October during the
UAW strike of certain U.S. operations. With a new labor agreement
since reached and ratified, the company is providing updated
financial expectations.
Lawler will say that Ford now anticipates full-year 2023
adjusted earnings before interest and taxes of $10.0 billion to
$10.5 billion. That would include $1.7 billion in strike-related
lost profits – $1.6 billion of that from the fourth quarter – owing
to interruptions in production of high-margin trucks and SUVs and,
in turn, vehicle wholesales about 100,000 units lower than
planned.
Ford generated $4.9 billion of net income and $9.4 billion in
adjusted EBIT through the first three quarters of the year, prior
to full effects of the work stoppage.
Full-year 2023 adjusted free cash flow is expected to be between
$5.0 billion and $5.5 billion.
What hasn’t changed, Lawler will say at the Barclays event, is
Ford’s conviction in the Ford+ plan to build an automaker that
thrives at the intersection of hardware, software and services in a
rapidly evolving industry.
“This industry is going through the biggest technology-led
transformation we’ve ever seen and some companies, new and old, are
going to be left behind,” Lawler said before the conference. “Ford+
is the right strategy to win – we’ve got a highly talented team
that allocates capital with great discipline, so that we’re
executing with consistency, generating strong growth and
profitability, and are less cyclical.”
Lawler will describe how Ford’s customer-centered businesses –
Ford Blue for gas and hybrid vehicles, Ford Model e for electric
vehicles, and Ford Pro for commercial customers – provide for
transparency, flexibility, accountability, disciplined capital
allocation and increasingly differentiated performance. Customers
of all three of the businesses will benefit from Ford’s emerging
software and services capabilities.
The new U.S. labor agreement with the UAW is expected to cost
$8.8 billion over the life of the contract, with gross wages,
accelerated wage progression and cost of living adjustments
representing the largest three elements of that total. Lawler said
again that the cost effect is anticipated to be about $900 per
vehicle by 2028 – or about 60 to 70 basis points of adjusted EBIT
margin – which Ford will work to offset through higher productivity
and lower expenses.
Ford plans to report fourth-quarter and full-year 2023 financial
results – and provide initial guidance about its financial
expectations for full-year 2024 – after the close of business on
Tuesday, Feb. 6.
About Ford Motor Company
Ford Motor Company (NYSE: F) is a global company based in
Dearborn, Michigan, committed to helping build a better world,
where every person is free to move and pursue their dreams. The
company’s Ford+ plan for growth and value creation combines
existing strengths, new capabilities and always-on relationships
with customers to enrich experiences for customers and deepen their
loyalty. Ford develops and delivers innovative, must-have Ford
trucks, sport utility vehicles, commercial vans and cars and
Lincoln luxury vehicles, along with connected services. The company
does that through three customer-centered business segments: Ford
Blue, engineering iconic gas-powered and hybrid vehicles; Ford
Model e, inventing breakthrough EVs along with embedded software
that defines exceptional digital experiences for all customers; and
Ford Pro, helping commercial customers transform and expand their
businesses with vehicles and services tailored to their needs.
Additionally, Ford is pursuing mobility solutions through Ford
Next, and provides financial services through Ford Motor Credit
Company. Ford employs about 177,000 people worldwide. More
information about the company and its products and services is
available at corporate.ford.com.
- Adjusted EBIT and adjusted free cash flow are non-GAAP
financial measures. When we provide guidance for adjusted EBIT and
adjusted free cash flow, we do not provide guidance for net income
or net cash provided by/(used in) operating activities, the
respective most comparable GAAP measures, because they include
items that are difficult to predict with reasonable certainty. See
Pages 60-61 of Ford’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2023, for the definitions of adjusted EBIT and
adjusted free cash flow.
- See Page 62 of Ford’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2023, for the reconciliation to GAAP of
Ford’s adjusted EBIT for the first nine months of 2023.
Cautionary Note on Forward-Looking
Statements
Statements included or incorporated by reference herein may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on expectations, forecasts, and assumptions by
our management and involve a number of risks, uncertainties, and
other factors that could cause actual results to differ materially
from those stated, including, without limitation:
- Ford and Ford Credit’s financial condition and results of
operations have been and may continue to be adversely affected by
public health issues, including epidemics or pandemics such as
COVID-19;
- Ford is highly dependent on its suppliers to deliver components
in accordance with Ford’s production schedule and specifications,
and a shortage of or inability to acquire key components, such as
semiconductors, or raw materials, such as lithium, cobalt, nickel,
graphite, and manganese, can disrupt Ford’s production of
vehicles;
- To facilitate access to the raw materials necessary for the
production of electric vehicles, Ford has entered into, and expects
to continue to enter into, multi-year commitments to raw material
suppliers that subject Ford to risks associated with lower future
demand for such materials as well as costs that fluctuate and are
difficult to accurately forecast;
- Ford’s long-term competitiveness depends on the successful
execution of Ford+;
- Ford’s vehicles could be affected by defects that result in
delays in new model launches, recall campaigns, or increased
warranty costs;
- Ford may not realize the anticipated benefits of existing or
pending strategic alliances, joint ventures, acquisitions,
divestitures, restructurings, or new business strategies;
- Operational systems, security systems, vehicles, and services
could be affected by cyber incidents, ransomware attacks, and other
disruptions and impact Ford and Ford Credit as well as their
suppliers and dealers;
- Ford’s production, as well as Ford’s suppliers’ production,
and/or the ability to deliver products to consumers could be
disrupted by labor issues, natural or man-made disasters, adverse
effects of climate change, financial distress, production
difficulties, capacity limitations, or other factors;
- Ford’s ability to maintain a competitive cost structure could
be affected by labor or other constraints;
- Ford’s ability to attract and retain talented, diverse, and
highly skilled employees is critical to its success and
competitiveness;
- Ford’s new and existing products and digital, software, and
physical services are subject to market acceptance and face
significant competition from existing and new entrants in the
automotive and digital and software services industries and its
reputation may be harmed if it is unable to achieve the initiatives
it has announced;
- Ford’s results are dependent on sales of larger, more
profitable vehicles, particularly in the United States;
- With a global footprint, Ford’s results could be adversely
affected by economic or geopolitical developments, including
protectionist trade policies such as tariffs, or other events;
- Industry sales volume can be volatile and could decline if
there is a financial crisis, recession, or significant geopolitical
event;
- Ford may face increased price competition or a reduction in
demand for its products resulting from industry excess capacity,
currency fluctuations, competitive actions, or other factors;
- Inflationary pressure and fluctuations in commodity and energy
prices, foreign currency exchange rates, interest rates, and market
value of Ford or Ford Credit’s investments, including marketable
securities, can have a significant effect on results;
- Ford and Ford Credit’s access to debt, securitization, or
derivative markets around the world at competitive rates or in
sufficient amounts could be affected by credit rating downgrades,
market volatility, market disruption, regulatory requirements, or
other factors;
- The impact of government incentives on Ford’s business could be
significant, and Ford’s receipt of government incentives could be
subject to reduction, termination, or clawback;
- Ford Credit could experience higher-than-expected credit
losses, lower-than-anticipated residual values, or
higher-than-expected return volumes for leased vehicles;
- Economic and demographic experience for pension and OPEB plans
(e.g., discount rates or investment returns) could be worse than
Ford has assumed;
- Pension and other postretirement liabilities could adversely
affect Ford’s liquidity and financial condition;
- Ford and Ford Credit could experience unusual or significant
litigation, governmental investigations, or adverse publicity
arising out of alleged defects in products, services, perceived
environmental impacts, or otherwise;
- Ford may need to substantially modify its product plans and
facilities to comply with safety, emissions, fuel economy,
autonomous driving technology, environmental, and other
regulations;
- Ford and Ford Credit could be affected by the continued
development of more stringent privacy, data use, and data
protection laws and regulations as well as consumers’ heightened
expectations to safeguard their personal information; and
- Ford Credit could be subject to new or increased credit
regulations, consumer protection regulations, or other
regulations.
We cannot be certain that any expectation, forecast, or
assumption made in preparing forward-looking statements will prove
accurate, or that any projection will be realized. It is to be
expected that there may be differences between projected and actual
results. Our forward-looking statements speak only as of the date
of their initial issuance, and we do not undertake any obligation
to update or revise publicly any forward-looking statement, whether
as a result of new information, future events, or otherwise. For
additional discussion, see “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2022, as
updated by our subsequent Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231130048917/en/
Media: T.R. Reid 1.313.319.6683
treid22@ford.com Equity Investment
Community: Lynn Antipas Tyson
1.914.485.1150 ltyson4@ford.com Fixed-Income
Investment Community:
Christopher Conti 1.313.418.1673 cconti5@ford.com Shareholder Inquiries: 1.800.555.5259 or 1.313.845.8540
stockinf@ford.com
Ford Motor (NYSE:F)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ford Motor (NYSE:F)
Historical Stock Chart
From Jul 2023 to Jul 2024