Ford Motors (NYSE: F) jumped 4% after-hours trading after the vehicle manufacturer raised its full-year outlook following a surprising Q2 profit. The company announced the revised outlook a week before General Motors’ (NYSE: GM) scheduled Q2 2020 earnings report.
Ford reports revenue of $24.13 billion in Q2
The sales of $24.13 billion fell short of projections due to the global scarcity of semiconductor chips that continue to impair production. In addition, Ford disclosed that it lost production of around 700,000 automobiles in the quarter. As a result, the adjusted pretax loss was $1.9 billion, with a net profit of $1.1 billion. The adjusted result was $0.13 per share versus a projected loss of $0.03 per share.
Ford stated that it is “spring-loaded” for 2H 2021 growth and beyond, citing strong demand for recently launched and forthcoming cars, including reservations. Its most recent car introductions include the highly-received electric Mustang Mach-E crossover and updated F-150, as well as two new Bronco types, including the “big Bronco” SUV. Since its launch in May, Ford has received over 120,000 bookings for the all-electric version of the F-150 pickup truck, the Lightning, with 75% of those being new to the company. In addition, Ford has recently begun taking reservations for the Maverick.
Ford raised its full-year outlook
Ford increased its full-year adjusted earnings before taxes by around $3.5 billion, to a range between $9 billion and $10 billion, due to strong demand for new vehicles such as the Ford Bronco SUV. In addition, because of improved market circumstances, sales volume will increase by nearly 30% from 1H.
Despite the rise, operational profit is likely to be lower in 2H 2021 than in 1H due to higher commodity costs, reduced earnings from Ford Credit, and other variables, including higher warranty expenses. In addition, given an expected supply increase in 2H 2021, Ford didn’t reveal the projected impact of the semiconductor chip shortfall on its full-year profitability. Instead, CEO Jim Farley described the situation as “fluid.”