Ford swings to $1.8 billion in Q1 net income as sales, pricing rise

Ford Motor Co. on Tuesday posted first-quarter net income of $1.8 billion, reversing a $3.1 billion loss a year earlier, and reaffirmed its full-year guidance as the company bounces back from global supply chain shortages.

Ford posted first-quarter revenue of $41.5 billion, up 20 percent from the same period of 2022, and margins of 8.1 percent, up 1.4 percentage points. That was driven by a 9 percent increase in vehicle shipments, as well as a more favorable sales mix and higher net pricing.

“This quarter was much smoother,” CFO John Lawler said, comparing the results to the fourth quarter of 2022, where the company left $2 billion in profits on the table due to issues with its operational execution. 

Lawler said the latest quarterly results were a “peek at what’s possible” from the company’s growth plans, called Ford +. 

In a call with analysts, CEO Jim Farley said he hopes Ford’s performance in the past quarter becomes a pattern of “boringly predictable…but extremely ambitious” earnings reports.

Ford's adjusted earnings before interest and taxes rose 45 percent to $3.4 billion. A majority of that — $2.6 billion — came from Ford Blue, the company's gasoline-powered business.

Ford made $1.36 billion on its commercial business, Ford Pro, and lost $722 million on its electric vehicle business, Model e.

Company officials have said they expect losses from the EV business to increase nearly 50 percent to $3 billion this year, while it expects Ford Blue to make about $7 billion and Ford Pro to produce about $6 billion in earnings.

Ford still expects to approach contribution margin breakeven on EVs by the end of this year. It expects to make 8 percent margins on EVs by late 2026.

Farley praised the Ford Pro unit, saying sales from subscription services are increasing and helping it become a more “resilient” operation whose profits and losses are less cyclical than the traditional auto business.

Ford on Tuesday said it continues to target $9 billion to $11 billion in adjusted EBIT on the full year and about $6 billion in adjusted free cash flow.

Despite the strong sales numbers in the first quarter, Ford officials warned that increasing incentives could be a headwind for the remainder of the year.

Ford, confronted with falling demand and sales in China, will restructure its operations in the key market and operate on lower outlays, and "double down" on its commercial vehicle business there, including EVs, Farley said. Ford's joint venture with Chinese automaker JMC Corp. can become a major exporter of lower-cost commercial electric and combustion vehicles, he added.

The company finished the first-quarter with nearly $29 billion in cash and more than $46 billion in liquidity.

Reuters contributed to this report.