[ad_1]
New York
CNN Business
—
Ford shrugged off the impact of supply chain problems and limited vehicle inventory to post better-than-expected revenue and earnings in the second quarter.
The number more closely watched by investors, its profit excluding special items, jumped to $2.7 billion compared to the $510 million it earned on that basis last year. Analysts polled by Refinitiv had predicted an increase in those adjusted earnings, but not by much, with a consensus forecast of $1.9 billion.
Revenue was $40.2 billion, up from $26.8 billion a year earlier. Revenue from auto sales rose 57% to $37.9 billion — handily topping the consensus forecast of about $3.6 billion. The revenue increase was on top of a 35% increase in the number of vehicles sold by Ford at dealers and distributors worldwide, showing that higher prices helped achieve those results.
The global auto industry has been struggling with supply chain problems, particularly shortages of computer chips, which have limited inventories on dealer lots. With demand outstripping supplies, retail car prices have hit record levels in recent months.
“We are moving with purpose and speed in the most promising period for growth in Ford’s history,” said CEO Jim Farley.
Concerns remain for automakers, however, and one of them is the growing risk of a recession hitting pent-up demand for new cars. Executives at rival General Motors said Tuesday that while it doesn’t see any signs of an economic downturn, it is preparing for that possibility.
Ford’s earnings statement was much stronger, confirming full-year earnings guidance and announcing a 50% increase in its dividend to 15 cents per share.
One piece of bad news in the report was a $2.4 billion charge against its net income due to the impairment of its investment in electric truck maker Rivian. This followed a $3.1 billion charge it took for the same reason in the first quarter, which turned into a net loss in that quarter’s net income. Ford’s holdings in the startup are still worth more than the $500 million it originally invested, though less than the value of that investment soon after Rivian’s IPO last fall.
Shares of Ford ( F ) gained 6% in after-hours trading on the report.
[ad_2]
Source link
