Ford Motor Co.
F 0.95%
swung to a internet lack of $3.1 billion within the first quarter, a reversal largely pushed by a steep loss in valuation of its stake in electric-vehicle startup
Rivian Automotive Inc.
The Dearborn, Mich., auto maker stood by its year-end steering of pretax revenue of $11.5 billion to $12.5 billion in 2022, regardless of continued challenges securing sufficient auto elements to maintain meeting strains totally operating. The quarterly loss compares with a internet revenue of $3.3 billion within the first quarter of 2021.
Revenue dropped 5% to $34.5 billion within the first quarter, reflecting decrease manufacturing. A semiconductor scarcity that has dragged on for greater than a yr continues to stifle Ford’s manufacturing facility output, leading to downtime at a number of crops through the quarter and hindering efforts to restock heaps with sufficient autos to fulfill client demand.
First-quarter working revenue excluding one-time objects was $2.3 billion, or 38 cents a share, edging previous analysts’ expectations of 37 cents a share. Still, working revenue was down from the $3.9 billion recorded within the prior-year interval.
“The capability of this business is much stronger than what we were able to provide in the quarter,” mentioned
John Lawler,
Ford’s chief monetary officer.
Ford shares have been roughly flat in after-hours buying and selling. The inventory closed Wednesday at $14.85 a share.
An early investor in Rivian, Ford had beforehand benefited from a post-IPO surge within the startup’s valuation. In 2021, Ford mentioned the rise in Rivian’s inventory worth resulted in a $8.3 billion paper achieve. But shares of Rivian and different EV startups have fallen in current months as early investor enthusiasm waned and executives slashed manufacturing projections. Rivan’s inventory has fallen practically 70% because the begin of the yr.
Ford mentioned Wednesday its weaker quarterly outcomes have been primarily attributed to a $5.4 billion mark-to-market loss on its Rivian funding.
The auto business’s outlook grew more and more unsure through the quarter, a interval through which the Ukraine warfare and pandemic-related restrictions in China have additional disrupted auto manufacturing and the availability chain.
Auto makers are also confronting inflationary pressures, significantly on core supplies utilized in manufacturing, such because the lithium, cobalt and nickel wanted for electric-vehicle batteries.
Mr. Lawler, the CFO, mentioned on Wednesday that Ford raised automobile costs within the first quarter, particularly on the Mustang Mach-E electrical SUV, to counteract rising commodity prices. He added that executives see a gradual enchancment within the availability of semiconductors and expects provides to enhance within the again half of 2022.
Mr. Lawler mentioned larger gross sales within the second half, together with continued sturdy pricing as dealership provides stay tight, will support the corporate in assembly its full-year steering.
General Motors
reported a 3% slide in internet earnings for the primary quarter however stood by its earlier year-end steering.
GM mentioned clients are paying larger costs for its autos, however these features are being offset by larger commodity and logistical prices. Those bills are weighing heavier on the underside line than in earlier quarters, the corporate mentioned.
A year-and-a-half into the highest job, Ford Chief Executive
Jim Farley
is attempting to maneuver aggressively into electrical autos and restructure inside operations to extra carefully align with newer rivals resembling
Tesla Inc.
that don’t have legacy gas-engine companies. In March, the corporate revealed it was separating its electric-vehicle operations from these devoted to gas-engine autos, by creating two distinct divisions.
In the close to time period, Ford continues to be attempting to get its manufacturing operations again on observe after dropping round 100,000 models of manufacturing within the first three months of the yr, in accordance with analysis agency AutoForecast Solutions.
Ford’s earnings observe a robust displaying from Tesla, which final week posted a $3.32 billion revenue within the first quarter. GM’s quarterly outcomes this week additionally outpaced analysts’ predictions.
Ford has made a number of current expansions into the electric-vehicle house, together with plans to spend $7 billion for 4 new factories in Tennessee and Kentucky. It additionally this week started constructing an electrical model of its bestselling F-150 pickup truck, a mannequin that can begin at $40,000, undercutting many rivals on worth.
The firm’s inventory, nevertheless, has fallen 28.5% this yr. The S&P 500 is down 12% since Jan. 1.
Ford dealerships are straining to fill their heaps and meet still-strong client demand. As stock ranges stay crunched, analysts predict automobile costs will keep excessive for the months to come back, serving to to counter rising prices pressures for auto makers.
Write to Nora Eckert at [email protected]
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