=Ford Motor (F) reported earnings on Wed 28 Apr 21 (a/h)

 

Ford Motor beats by $0.68, beats on revs; reaffirms FY21 EBIT guidance; expects to lose about 50% of planned Q2 production due to the shortage, but Q2 should be the trough

Reports Q1 (Mar) earnings of $0.89 per share, excluding non-recurring items, $0.68 better than the S&P Capital IQ Consensus of $0.21; automotive revenue (not total revs) rose 7.1% year/year to $33.55 bln vs the $32.72 bln S&P Capital IQ Consensus.

• Quarterly adjusted EBIT was a record $4.8 bln and included a noncash gain of $902 mln on Ford's investment in Rivian. Adjusted EBIT additionally benefited from robust customer demand for the company's new products, tight vehicle inventories and favorable year-over-year cost performance.
• Q1 revenue in North America increased 5% to $23.0 billion, benefiting from strong customer demand for Mustang Mach-E, the all-new 2021 F-150 and Bronco Sport and tight vehicle inventories related to semiconductor-related production declines. SUVs and pickups both accounted for increased shares of regional sales.

Chip Shortage: Co says semiconductor availability, which was exacerbated by a fire at a supplier plant in Japan in March, will get worse before it gets better. Currently, co believes that the issue will bottom out during Q2, with improvement through the remainder of the year.

Outlook: Co reaffirms full year EBIT outlook at $5.5-6.5 bln, which had been previously lowered from $8-9 bln earlier in the year. Co says it was among the first automakers to identify the potential for a 10-20% adverse effect on manufacturing volumes from increasing constraints on global semiconductor supplies entering 2021. Chip shortage was made worse by the recent supplier fire in Japan.

Chip shortage Impact on Q2: Ford now expects to lose about 50% of its planned Q2 production, up from 17% in Q1 -- again, implying that Q2 will be the trough of the issue. Ford anticipates the flow of semiconductors from the Japan supplier to resume by the end of Q2 - but, like many others in the industry, that the broader global semiconductor shortage may not be fully resolved until 2022. Co now assumes that it will lose 10% of planned 2H21 production. All told, Ford now expects to lose about 1.1 mln units of production this year to the semiconductor shortage.