Investing Club: 'Our margins have never been higher,' Ford CEO tells Cramer

Published Fri, Feb 4 20226:06 PM ESTUpdated Fri, Feb 4 20226:16 PM EST

Earlier today, we reached out to Ford CEO Jim Farley to get a better idea of what exactly went wrong in the fourth quarter and gauge his confidence in the future. Here is what Mr. Farley had to say: Hi Jim: Q4 was frustrating given our miss was completely tied to the COVID shutdown in China and the subsequent one time supply chain shock for North American Production. We have several key suppliers that had to shut operations. There will be an overhang in Q1 as well. We drained the logistics system from China, but the impact was felt late in the quarter. Our margins have never been higher, that's the good news. This is why we guided for 2022 profits to increase more than our volume recovery of 10-15%. We are getting terrific leverage from increment volume and we now see line of sight to stronger than 8% margins in auto! Sincerely, Jim There you have it. While we admittedly expected better from them, we do not think Ford should be penalized by an isolated incident like a Covid related shutdown that was out of their control. Instead of looking backward at what went wrong, we think investors must look forward to the future. And we like what we see for next year. With profits expected to increase in 2022 and management's goal of 8% margins within reach, we reiterate our stance from last night's report and today's monthly meeting that Ford is a buy on this selloff. (Jim Cramer's Charitable Trust is long F. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Jim Farley, Ford CEO

Ford

Earlier today, we reached out to Ford CEO Jim Farley to get a better idea of what exactly went wrong in the fourth quarter and gauge his confidence in the future.

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