Ford (F) earnings Q4 2022

Ford CEO Jim Farley takes off his mask at the Ford Built for America event at Ford’s Dearborn Truck Plant on September 17, 2020 in Dearborn, Michigan.

Nick Antaya | GettyImages

DETROIT – Ford Motor reported an ugly fourth quarter, missing Wall Street’s earnings expectations and falling short of its own full-year guidance by $1.1 billion, as the company reported “execution issues” that plagued production.

Ford’s fourth-quarter net income was $1.3 billion, $11 billion lower than the same period a year earlier. For the full year, Ford lost $2 billion, nearly $20 billion off its 2021 profit.

“We should have done much better last year,” CEO Jim Farley said in an earnings release. “We left about $2 billion in profits on the table that were within our control, and we’re going to correct that with improved execution and performance.”

Shares of Ford were off by more than 6% during after hours trading. The stock closed Thursday at $14.32 per share, up 3.8% on the session.

Here’s how Ford performed in the fourth quarter, compared with analysts’ estimates as compiled by Refinitiv:

  • Adjusted earnings per share: 51 cents vs. 62 cents estimated
  • Automotive revenue: $41.8 billion vs. $40.37 billion estimated

In October, Ford said it expected full-year adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion. On Thursday it reported 2022 earnings of $10.4 billion, nearly flat year over year.

Ford CFO John Lawler said Thursday that the company’s disappointing earnings were largely due to execution and supply chain management issues. The company fell short of expected sales by 100,000 units, equaling to about $1 billion in missed earnings, he said.

Lawler said the automaker is looking to cut additional costs this year. He did not rule out additional layoffs, specifically in Europe.

“Our cost structure is not competitive,” he said during a media call. “Our quality is not where it needs to be. And we will take the actions and be more aggressive about making sure that we’re making progress on both of those key areas for us in 2023.”

“It’s a significant amount we plan on taking out this year,” Lawler said regarding cost-cutting, adding more information will come throughout the year.

There was pressure on Ford to deliver a strong fourth quarter and relatively solid guidance. Crosstown rival General Motors on Tuesday significantly outperformed Wall Street’s expectations. That automaker also forecast stronger-than-expected 2023 results, including adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7.

For 2023, Ford said it expects to earn between $9 billion and $11 billion in adjusted earnings before interest and taxes, presuming seasonally adjusted annual rates of about 15 million vehicles in the US and about 13 million in Europe.

Ford anticipates generating about $6 billion in adjusted free cash flow. That assumes “no distributions” from its financial arm Ford Credit, the company said.

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Andrew Naughtie

News reporter and author at @websalespromo