Ford Motor Company (NYSE:F) stock fell 11.24% (As on Feb 4, 12:09:01 AM UTC-4, Source: Google Finance) after the company reported fourth-quarter earnings that significantly missed Wall Street’s earnings expectations and slightly missed on revenue. Ford said it has 275,000 orders for its electric F-150 Lightning, Transit vans, and Mustang Mach-E utility vehicles. It expects to double electric vehicle production capacity to 600,000 vehicles a year by 2023. While the automaker hit its annual earnings guidance for 2021, it missed production targets analysts were expecting due to supply chain problems, including an ongoing shortage of semiconductor chips. For the quarter, Ford’s North American operations, as they have been, contributed the most to the automaker’s earnings, up by 68% to $1.8 billion compared to a year earlier. International losses included $150 million in China, down 130%, and $159 million, a 139% decline, in Europe. The automaker’s fourth-quarter net income swung to a $12.3 billion profit from a $2.8 billion loss during the last three months of 2020. That included an $8.2 billion gain on its investment in electric vehicle start-up Rivian Automotive. Ford had $36.5 billion in cash and investments to end last year, including $10.6 billion in its Rivian stake.
F in the fourth quarter of FY 21 has reported the adjusted earnings per share 26 cents, missing the analysts’ estimates for the adjusted earnings per share of 45 cents, according to analysts’ estimates as compiled by Refinitiv. The company had reported the adjusted revenue growth of 35.9 percent to $35.3 billion in the fourth quarter of FY 21, slightly missing the analysts’ estimates for revenue of $35.5 billion.
By 2022, Ford estimates it will earn between $11.5 billion and $12.5 billion in adjusted pre-tax profits, up 15% to 25% over 2021. It generates between $5.5 billion to $6.5 billion in adjusted free cash flow. The expected increase in earnings comes as constraints of the chip shortage are expected to ease throughout the year.
The automaker said it expects to spend between $7 billion and $8 billion, up from $6.2 billion in 2021, as per turnaround plan and accelerates its transition to electric vehicles. That includes launches of electric versions of the Transit cargo van and F-150 pickup.
The company’s second-quarter launch for the electric F-150 Lightning remains on track, with the company halting reservations of the vehicle after hitting 200,000 units.