Ford’s second-quarter 2023 report reveals solid operating results with a 12% YoY increase in revenue to $45 billion. The surge was largely driven by the popularity of its various product lines including trucks, SUVs, and commercial vans.
A standout was Ford’s electric unit, Ford Model e, that registered a revenue increase of 39%, further establishing itself in the upcoming EV market. However, despite strong overall performance, the company reported a loss of $4.5 billion in the electric division.
Ford’s commercial-focused Ford Pro experienced robust growth with a 22% surge in revenue, leading to an EBIT of $2.4 billion, a 15% margin. The unit’s growth was fueled by the increasing appeal of its products and services to commercial customers, including software and repair services sales.
The company’s Ford Blue gas and hybrid business also reported higher wholesales and revenue with an EBIT of $2.3 billion, boosted by the all-new global Ranger pickup which is proving to be both popular and profitable.
With an optimistic outlook, the company revised its full-year 2023 guidance for adjusted EBIT to between $11 billion and $12 billion, and for adjusted free cash flow to between $6.5 billion and $7 billion.
Ford CEO Jim Farley emphasized the company’s resilience and efficiency in adapting to a shifting market landscape. “The shift to powerful digital experiences and breakthrough EVs is underway and going to be volatile, so being able to guide customers through and adapt to the pace of adoption are big advantages for us,” Farley said.
Farley further stated that Ford now expects to achieve a 600,000-unit EV production run rate during 2024. This anticipation comes amidst the backdrop of increasing production capacity at the Rouge Electric Vehicle Center in Michigan and improvements in pricing for EV battery raw materials.
Despite the noted losses in the Ford Model e segment, the company remains committed to its EV strategy. They plan to transform their existing complex in Oakville, Ont., Canada for high-volume EV manufacturing, assembling battery packs and installing them in next-generation electric vehicles produced on the same campus.
The development comes alongside substantial progress in expanding the Mustang Mach-E capacity in Cuautitlan, Mexico, and ongoing construction of a next-generation EV pickup plant in West Tennessee.
Despite the overall robust performance and promising future projections, Ford Credit reported a dip in earnings before taxes to $390 million due to a decline in residual values of leased vehicles and other factors. Nevertheless, the company remains hopeful about its future prospects and plans to report third-quarter 2023 financial results on Thursday, October 26.
