Ford blows past earnings estimates in Q3: ‘something has changed here’

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Oct 27, 2021
  • Ford topped earnings estimates in Q3 and raised full-year guidance.
  • The Michigan-based automaker says chip shortage is alleviating.
  • CFRA's Nelson discussed Ford's earnings on CNBC's "Closing Bell".

Ford Motor Co (NYSE: F) reported mixed results for its fiscal third quarter on Wednesday. Shares, however, jumped 7.0% in extended trading as the automaker raised its full-year guidance on confidence that chip shortage was alleviating.

CFRA’s Nelson likes Ford more than GM

On CNBC’s “Closing Bell”, CFRA’s Garrett Nelson said Ford is now in a better position in terms of semiconductor supply compared to its peer General Motors.

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Year-to-date, Ford has struggled more with the semiconductor shortages than GM. But clearly, something has changed here recently. Ford now has ample supply of semiconductors and a lot more product momentum with their vehicle mix. So, we like Ford a lot more than GM.

Q3 financial performance

Ford earned $1.8 billion in Q3 that translates to 45 cents per share. In the same quarter last year, its earnings stood at a higher $2.4 billion or 60 cents per share. Adjusted for non-recurring items, the car manufacturer earned 51 cents per share.

The American multinational generated $35.7 billion in revenue that represents a 5.0% decline from last year. According to FactSet, experts had forecast a much narrower 27 cents of adjusted EPS but a higher $38.2 billion in sales.

Future outlook

For fiscal 2021, Ford now forecasts its adjusted EBIT to fall in the range of $10.5 billion to $11.5 billion on strong demand for new vehicles (including EVs) and semiconductor availability that “markedly” improved from Q2. CEO Jim Farley said:

This is the most exciting Ford line-up I’ve seen.

The Michigan-based automaker also said it’d resume dividend payments from the current quarter, as per the earnings press release.

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