March 1, 2024

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Stocks rise with focus on earnings

Stocks rise with focus on earnings

Ford (F) stock rose more than 2% in morning trading after the legacy automaker reported fourth-quarter results after the bell.

Yahoo Finance Bras Subramanian:

The automaker reported fourth-quarter sales that easily beat expectations and forecast full-year earnings that beat estimates, though the company still sees further losses for its electric vehicle unit.

These results come after General Motors (GM) announced strong earnings and earnings guidance last week, indicating strength in the US auto sector overall.

Ford reported total revenue of $46 billion versus $40.35 billion in Bloomberg estimates, which is $2 billion more than last year despite the lingering effects of the United Auto Workers (UAW) strike early in the fourth quarter.

In terms of profitability, Ford reported adjusted earnings per share of $0.29 versus $0.13 estimated, on adjusted EBIT of $1.1 billion, versus $988.2 million expected.

For the year, Ford generated adjusted EBIT of $10.3 billion, at the high end of its 2023 adjusted EBIT forecast of $10 billion to $10.5 billion (which includes $1.7 billion of lost earnings related to… by strike). Ford has revised its 2023 earnings forecast after ratifying its labor agreement with the UAW.

As for its full-year outlook for 2024, Ford expects adjusted EBITDA to range from $10 billion to $12 billion — lower than Ford's pre-UAW strike 2023 earnings forecast of $11 billion to $12 billion, but Higher than estimates of $9.24 billion. Ford rival General Motors issued 2024 earnings guidance that matches its initial forecast before the 2023 UAW strike.

“Guidance assumes U.S. industry volumes flat to modestly higher for the full year, with overall vehicle prices declining,” the company said in a statement.

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Ford also declared a first-quarter regular dividend of $0.15 per share and a supplemental dividend of $0.18 per share.

Ford CFO John Lawler said in a statement that Ford will improve capital efficiency by selectively reducing investments and “raising the bar” on expected returns on new initiatives.

“The goal is to improve the adjusted total return on invested capital from about 14% in 2023 to 20% over the next two years,” Lawler said. “Simply, 'good' is not good enough, and investments are going to projects that have reliable plans to achieve their targeted returns.”