DETROIT — Ford Motor Co. on Wednesday said third-quarter net income fell 24 percent to $1.8 billion because of the lingering microchip shortage, but strong demand drove the automaker to again raise its full-year guidance and reinstate a quarterly cash dividend.
Ford reported adjusted earnings of $3 billion before interest and taxes, down from $3.6 billion in the same period a year ago.
Revenue fell 4.8 percent to $35.7 billion.
Shares in Ford rallied on the news, rising 8.7 percent to close at $16.86 on Thursday.
Still, the automaker raised its full-year guidance to adjusted EBIT of $10.5 billion to $11.5 billion, up from a previous range of $9 billion to $10 billion. The new forecast is nearly double the $5.5 billion to $6.5 billion that Ford had projected in the early days of the chip crisis.
"It's really a proof point we're gaining more traction with our Ford+ plan," CFO John Lawler told reporters. "The results show the underlying strength of our business."
Chip situation improving
The automaker started the quarter with between 60,000 and 70,000 unfinished vehicles awaiting chips and related components. Lawler said it ended the quarter with 27,000 partially-built vehicles and that number should drop below 5,000 by the end of the year.
On Wednesday, Ford said an improvement in semiconductor supplies increased regional product shipments 67 percent over the second-quarter.
Ford expects volume in the fourth-quarter to rise roughly 10 percent over Q3. Still, Lawler said the chip shortage will remain fluid through 2022 and "could expand until 2023 but we do expect scope and severity to reduce."
Next year, Lawler says Ford expects a wholesale volume increase of roughly 10 percent compared to 2021.
In North America, Ford posted a pretax profit of $2.4 billion, down 24 percent from a year earlier. It posted a 10.1 percent profit margin in the region, and Lawler said Ford was on track to hit its full-year 10 percent margin goal by 2023.
Elsewhere, Ford lost money in Europe and China, but posted profits in South America and its International Markets Group. The $2 million profit it earned in South America was its first quarterly profit there since 2013, Lawler said.
Executives credit Ford’s performance in North America to a recently-transformed portfolio anchored by new products like the Mustang Mach-E, Bronco family of vehicles and recently-redesigned F-150 pickup.
The company plans to add a number of important new vehicles in the coming years, including the E-Transit van by the end of this year and the F-150 Lightning EV next year. Ford noted it would spend between $40 billion to $45 billion in capital expenditures between 2020 and 2025. Of that, $30 billion will be dedicated to EVs.
"We're taking big swings," CEO Jim Farley said. Farley, however, noted the rollout of the company's BlueCruise hands-free driver assist system has been delayed until the first-quarter of 2022 as Ford works to simplify the user experience. Officials had previously said the system would go live via an over-the-air update on certain models some time this year.
"We pushed it back because we want it to be much simpler for the customer than was originally planned," Farley said.
Ford suspended its dividend in March 2020, at the start of the coronavirus pandemic. It said a 10-cent dividend would go out to shareholders on Dec. 1. Lawler said it would cost the company $400 million but would not affect its ability to fund future growth plans.
"We are not capital constrained," he said. "What it reflects is the strength of our business. We can fund all of our growth initiatives.