After the market closed on Tuesday, May 2, Ford Motor (F) revealed its Q1 2023 earnings figures, giving us our closest look yet at the company’s Model e electric car division.
We published a sneak peek of Ford’s first-quarter financial data earlier today. In the initial three months of 2023, Ford’s sales of electric vehicles slowed down. Ford recently reopened Mustang Mach-E orders, and despite global EV sales increasing 41% YOY, Mustang Mach-E volumes decreased by almost 20% to just over 5,400 units. This is because Ford retooled its Mexico factory in order to increase output in the second half of the fiscal year.
For the first time, Ford has broken out financial data by business unit in an earnings report, allowing us to take a deeper look at the Model e electric vehicle market.
Ford has stated that it anticipates losing $3 billion upon EVs this year since it tries to triple the production of the F-150 Lightning and double the manufacture of the Mach-E, but it has not specified how much it intends to suffer per quarter.
The anticipated loss follows Ford’s previous disclosure that it has lost $2.1 billion last year producing EVs, for an aggregate deficit of $6 billion since 2021.
However, as it strives to achieve its goal of an 8% EBIT margin by the end of 2026, Ford does anticipate that the breakeven point for its first-generation EVs will be reached later this year.
Analysts on Wall Street anticipate a rise in Ford’s overall revenue to roughly $39.2 billion and a minor year-over-year increase in EPS to 0.42.
Results of Ford’s first-quarter profits
Ford’s Model e EV division brought in $700 million in the initial quarter of 2023, a 27% drop from the prior year.
Ford’s operating losses for the Model e increased to $722 million, nearly doubling year over year from $342 million in Q1 2022. The operating margin for the business unit likewise decreased, to (102.1%), a loss of 63 points of percentage from the previous year.
With total revenue of $41.5 billion, up 20% from one year ago and above expectations, the electric vehicle (EV) market was the only business unit that wasn’t profitable.
Operating income at Ford Pro, the company’s commercial and software division, nearly tripled to $1.4 billion.
Ford reported a $1.8 billion total net profit compared to a $3.4 billion net loss in 2022, which was principally brought on by a decline in the value of its Rivian investment.
With an adjusted free cash flow of $692 million, the cash flow through operations was $2.8 billion. Ford had approximately $29 billion in liquidity along with over $46 billion in financial assets at the end of the quarter.
As it gets ready for a breakthrough year with its electric vehicles, rival American carmaker General Motors also reported robust overall Q1 results for earnings with revenues rising to $40 billion.
Ford, in contrast to GM, is maintaining its adjusted EBIT guidance of $9 billion to $11 billion rather than increasing it. Regarding the Model e, Ford remains true to its forecast of a $3 billion loss for the entire year.
In after-hours trading on the news, Ford’s stock is almost flat (-1%), down about 9% over the past year.
For updates from Ford’s Q1 2023 earnings call, check back. The most recent highlights can be found by refreshing the page.
