Ford loses $523 million in the fourth quarter, but pushes hard on Motorsport | FormulaPassion.it

Ford reported a fourth-quarter net loss of $523 million, versus a profit of $1.26 billion in the same period a year earlier, due to a large accounting charge on pension plans and the effects of a labor strike. six weeks in several factories by the United Auto Workers union. But this does not stop the ambitious sports programs just launched. Indeed, Motorsport is seen as an element of relaunching the brand.

Excluding one-time items, the company earned 29 cents per share, beating Wall Street estimates by 12 cents, according to FactSet. Revenue for the period was $46 billion, up 4% from a year ago, beating estimates of $43 billion. Ford reported a noncash accounting loss of $1.7 billion in the quarter due to the remeasurement of employee pensions and other post-retirement benefits. The company has forecast pre-tax profit of between $10 billion and $12 billion this year.

Based on strong free cash flow, Ford announced an additional dividend of 18 cents per share, on top of the normal 15 cents per share. CFO John Lawler said on March 14 about 58,000 UAW-represented workers will receive profit-sharing checks averaging $10,400.

Allowances will vary based on the number of hours worked. Lawler said the company would have had a strong quarter without the lost profits and strike settlement costs that were accounted for at the end of the year. Ford said the strike caused the loss of production of high-profit trucks and SUVs. UAW workers shut down the company's largest and most profitable factory in Louisville, Kentucky, which makes large SUVs and heavy-duty pickups. Lawler said Ford expects reductions in material costs and manufacturing efficiencies to save Ford $2 billion this year, offsetting the cost of the new UAW contract.

Ford Blue, the company's combustion engine unit, reported a pre-tax profit of $813 million in the fourth quarter, $736 million less than in 2022. Ford Pro, the unit deals with commercial vehicles, made $1.8 billion in pre-tax profits, an increase of $361 million from the previous year. But Model, and the electric vehicle sector, lost $1.57 billion, worsening the loss by $939 million from 2022. The company expects pre-tax losses for Model to increase from $4.7 billion last year to a range of $5 to $5.5 billion this year. But it expects Ford Pro to make $8 billion to $9 billion, up from $7.2 billion last year. Ford Blue is expected to have a turnover of 7-7.5 billion dollars, more or less in line with last year.

Chief Executive Jim Farley told analysts there was a seismic shift in demand for electric vehicles in the last half of 2023, with price cuts of up to 20% worldwide widening the company's losses. Coming out of the pandemic, with shortages of computer chips driving up prices and cutting production, early adopters were willing to pay a premium for electric vehicles, giving a “false read” on the strength of vehicle demand electrical, Lawler said. But last year, sales have shifted toward the “early majority,” many of whom aren't ready to pay a premium or deal with range anxiety or a lack of charging stations. Ford still believes electric vehicles are the future, even as it slows battery and vehicle production, Lawler said. Farley said Ford will focus sales of larger electric vehicles in sectors where the company dominates, such as trucks and vans. Additionally, he plans to shift some capital spending to smaller electric vehicles, designed by a small independent team that has developed a flexible platform on which to build them. Ford, Farley said, is focusing on reducing the cost of electric vehicles and cutting capital spending so they can make money within a year of hitting showrooms. “We will not go to market with a vehicle unless we are completely convinced that it will be profitable,” he said, “I know that this is a huge breakthrough and a major figure.”