Autos

Ford sees first-quarter profit dragged lower by Rivian stake, but maintains 2022 earnings guidance

Key Points
  • Ford posted first-quarter results Wednesday that were in line with Wall Street's expectations, though its net profit was dragged down by a stake in electric vehicle maker Rivian.
  • Rivian stock shed about 52% of its market cap during the first quarter, bringing the value of Ford's stake down from $10.6 billion to $5.1 billion.
  • Despite increased costs and supply chain problems, Ford reaffirmed its pretax adjusted earnings forecast of between $11.5 billion and $12.5 billion for the year.

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Ford beats top and bottom line, reaffirms full year guidance

DETROIT – Ford Motor posted first-quarter results Wednesday that were in line with Wall Street's expectations, though its net profit was dragged down by a stake in electric vehicle maker Rivian Automotive and reduced vehicle production.

Ford reported an unadjusted net loss of $3.1 billion, including a loss of $5.4 billion on the company's 12% stake in Rivian. That's compared with a net profit of $3.3 billion during the same period a year ago.

Rivian stock shed about 52% of its market cap during the first quarter, bringing the value of Ford's stake down from $10.6 billion to $5.1 billion.

Ford executives declined to comment during the company's earnings call on when, or if, the company plans to exit Rivian after a lock-up period for pre-IPO investors ends on May 8. Rivian's stock has fallen roughly 60% since its IPO on Nov. 9.

"We're not going to comment on Rivian," Chief Financial Officer John Lawler said Wednesday during the call.

Despite increased costs and supply chain problems during the quarter, Ford reaffirmed its pretax adjusted earnings forecast of between $11.5 billion and $12.5 billion for the year.

Shares of Ford were up nearly 2% during after-hours trading to about $15.10 a share. The stock closed at $14.85 a share, up roughly 1%.

Here's how Ford did compared with what Wall Street expected:

  • Adjusted EPS: 38 cents vs. 37 cents, according to Refinitiv consensus estimates
  • Automotive revenue: $32.1 billion vs. $31.13 billion, according to Refinitiv consensus estimates

Lawler described Ford's first-quarter results as "mixed," citing supply chain problems and an adjusted pretax profit of $2.3 billion that, even excluding the Rivian hit, came in lower than the $3.9 billion it reported a year ago.

Strong vehicle pricing and expectations for production to increase throughout the year allowed the company to maintain its guidance, Lawler said. He reconfirmed that the automaker expects wholesale volumes, which are closely correlated with production, to increase by 10% to 15% compared to 2021.

Ford F-150 Lightning trucks manufactured at the Rouge Electric Vehicle Center in Dearborn Michigan.
Courtesy: Ford Motor Co.

Ford's wholesale volumes were down 9% during the first quarter from a year earlier to 966,000 units.

For the quarter, Ford earned $1.6 billion from its North American operations, a significant decline from the $2.9 billion it made in that market a year ago. Its European operations reported a $207 million pretax profit compared with $341 million a year earlier. Losses from its operations in China widened from $15 million a year ago to $53 million.

Ford's stock has been under pressure this year, down about 30% this year. It was the top growth stock among automakers in 2021.

The company's first-quarter results come a day after its crosstown rival, General Motors, easily beat Wall Street's earnings expectations. GM also surprised analysts by maintaining its adjusted pretax profit guidance of $13 billion to $15 billion for 2022, despite the litany of supply chain issues and increased costs.