Ford reported better-than-expected first quarter results, with revenue of $42.8 billion and adjusted earnings per share of $0.63. The company’s adjusted EBIT came in at $2.8 billion, beating estimates. Despite not raising its full-year profit outlook, Ford said its adjusted EBIT was on track to reach the high end of $10 billion to $12 billion.
Ford’s success in the first quarter can be attributed to its changing product strategy and focus on gas and hybrid offerings. The company divided its business into three units: Ford Blue for traditional gas-powered autos, Model e for the EV division, and Ford Pro for its commercial and super duty truck business. Ford Blue generated $21.8 billion in revenue with an EBIT of $905 million, while Ford Pro achieved $18.0 billion in revenue with an EBIT of $3.01 billion. However, Model e reported only $100 million in revenue with an EBIT loss of $1.32 billion.
Despite the focus on gas and hybrid vehicles, Ford is pushing back EV production at its BlueOval City EV campus in Tennessee and delaying the launch of upcoming EVs at its plant in Oakville, Ontario. This decision aims to ensure a smoother transition and maximize the potential of these electric vehicles. Ford President and CEO, Jim Farley, emphasized that Ford is committed to giving customers vehicles they are passionate about while leading the industry for the long haul.
In terms of sales, Ford saw a 6.8% increase in US deliveries during Q1, driven by strong sales of electrified products such as hybrids. The Ford Maverick hybrid pickup had its best quarter ever, with sales increasing by 77%. Overall hybrid sales rose by 42% to 38,421 units. Additionally, Ford’s EV portfolio performed well, with an 82% jump in sales to 20,223 EVs sold in Q1. The Mustang Mach-E saw a sales increase of 77.3% to 9,589 units, while the Lightning pickup experienced an 80.4% surge to 7,743 units sold.
However, there was a slight setback with flagship F-150 sales, which fell by 10.2% in the quarter to 152,943 units. This decline can be attributed to the slow ramp-up of the all-new F-150, which only started sales in March.
Despite the positive results, Ford relied on heavy discounting, cheap financing rates, and lease deals to boost sales. While these strategies may have helped move inventory, it raises questions about the sustainability of these tactics in the long term.
Overall, Ford’s first quarter results demonstrate the company’s commitment to its changing product game plan and its focus on gas and hybrid vehicles. However, the delayed EV production and reliance on discounts highlight challenges that Ford will need to address moving forward to maintain its momentum in the market.