“We’re moving with purpose and speed into the most promising period for growth in Ford’s history — to innovate and deliver great products and connected services, raise quality and lower costs,” CEO Jim Farley said in a statement. “We’re giving customers great experiences and value, improving our profitability and making Ford the next-generation transportation leader.”
Ford’s net income in the quarter was dragged down by a $2.4 billion loss from its investment in Rivian Automotive Inc.
Chip shortage easing
In a sign the semiconductor shortage might be easing, CFO John Lawler said Ford has about 18,000 vehicles waiting for chips or related components. That's down from 53,000 the previous quarter.
Ford’s profits were driven, as usual, by the automaker's performance in North America, where it made $3.3 billion, up significantly from the $192 million it earned in the second quarter of 2021. It earned $104 million in South America, $10 million in Europe and $60 million in its international markets group.
Ford lost $121 million during the second quarter in China, which the automaker mostly blamed on lower vehicle shipments due to pandemic restrictions.
Ford reaffirmed its full-year guidance of $11.5 billion to $12.5 billion in adjusted EBIT, which would be 15 to 25 percent more than it earned in 2021. Ford expects production volumes to increase 10 to 15 percent over 2021 levels.
Executives also announced the company would increase its quarterly dividend by 50 percent -- to 15 cents per share -- starting this quarter. The hike returns the dividend to pre-pandemic levels.
Ford executives on Wednesday declined comment on a recent Bloomberg report that it plans to cut up to 8,000 salaried jobs in the near future, although Farley reiterated his stance that Ford has too many people.
“We have skills that don’t work any more and we have jobs that need to change,” he said. “In the past, often indiscriminately, we’d take the cost out. That’s not what’s happening at Ford now. This is a different kind of change, where we’re reshaping the company.”
Despite reaffirming its full-year outlook, Lawler said Ford now expects $3 billion in “inflationary pressures” this year, up from the $1 billion increase it forecast last quarter. Ford also expects a $4 billion increase in commodity prices, which could offset favorable pricing.
Still, Lawler said Ford anticipates strong demand through the remainder of the year.
“The industry is still running stronger than what we can supply,” he said. “At this point, we’ve not seen it slow down.”