Investment News

Ford reports quarterly loss that tops $2 billion, increases investment in electric vehicles

Ford Motor Co. late Thursday reported a wider-than-expected quarterly loss, but the stock traded higher as Wall Street focused on the auto maker’s renewed push toward autonomous and electric vehicles.

Ford
F,
+3.20%
said it lost $2.8 billion, or 70 cents a share, in the quarter, compared with a loss of $1.7 billion, or 42 cents a share, in the year-ago quarter. Sales fell to $36 billion from $39.7 billion a year ago.

Analysts polled by FactSet had expected Ford to report a GAAP and adjusted loss of 7 cents a share on sales of $36.8 billion.

Ford said it increased its “commitment to invest in growth,” planning to spend more than $22 billion in electric vehicles and $7 billion in autonomous vehicles. The investment in EVs is nearly double an earlier allocation, the company said.

“The transformation of Ford is happening and so is our leadership of the EV revolution and development of autonomous driving,” Chief Executive Jim Farley said in a statement.

In the fourth quarter, Ford began U.S. sales of its the all-electric Mustang, the Bronco Sport and 2021 F-150 pickup. These vehicles, alongside the return of the Ford Bronco this summer, are expected to be “significant contributors to 2021 results,” the company said.

“We are accelerating all our plans — breaking constraints, increasing battery capacity, improving costs and getting more electric vehicles into our product cycle plan,” Farley said.

The company earlier Thursday said it was curbing production of its F-150 pickup truck, its biggest moneymaker and the No. 1 vehicle sold in the U.S. for decades running, due to a shortage of semiconductors.

In the earnings release later on Thursday, Ford said that the global semiconductor shortage is creating “uncertainty” across multiple industries and will impact Ford’s 2021 operating results.

Ford shied away from giving specifics, saying it was “premature to try to size what availability will mean for our full-year performance.” Current estimates from suppliers point to “losing 10% to 20% of our planned first-quarter production,” Chief Financial Officer John Lawler said.

Ford is on track to earn $8 billion to $9 billion in adjusted EBIT in 2021, and generate between $3.5 billion and $4.5 billion in adjusted free cash flow, Lawler said.

In the earlier statement on Thursday, Ford said it will cut F-150 production at a Detroit-area plant starting next week to just one shift, from three. Another F-150 plant will run two of its three shifts next week. Both factories are expected to return to their regular, round-the-clock schedules on Feb. 15.

Shares of Ford have gained about 24% in the past 12 months, compared with gains around 17% for the S&P 500 index
SPX,
-0.11%.