Ford Motor bucks trend, doubles Street's earnings expectations

Ford Motor, charging forward with big investments in electric vehicles, raised its full-year profit forecast and said it will restore its dividend, sending the stock soaring as much as 11 per cent.

The automaker lifted its 2021 profit forecast for the second time in as many quarters and is now projecting $10.5 billion to $11.5 billion in earnings before interest and taxes. The reinstated quarterly dividend of 10 cents a share will be paid on December 1, the company said. Ford suspended the payout at the onset of the pandemic in March 2020.

Ford attributed the strong results to a let-up in the critical shortage of semiconductors — a problem still haunting most automakers — along with strong demand for its vehicles. Ford has amassed the largest inventory of vehicles in the industry and boosted average selling prices by 13 per cent to $51,460, according to researcher Edmunds.com. 

“We’re fully invested in this future and we’re taking big swings,” Chief Executive Officer Jim Farley said on a call with analysts. “We’re moving aggressively to lead the electric vehicle revolution.”

Farley said the company has annual demand for 200,000 electric Mustang Mach-E SUVs and is moving quickly to boost output of EVs. The automaker is beginning to build the Mach-E in China, augmenting production in Mexico.

By the mid-2020s, Ford will have factory capacity to build more than 1 million battery electric vehicles a year. “And I think we’ll need more,” Farley said.

While Ford sees the chip shortage easing, Chief Financial Officer John Lawler told reporters it could still extend into 2023. Ford’s factories won’t run at full tilt until the end of next year, he said.

“We seeing about 10 per cent” sales growth in 2021, Law­ler said. “And we see that the chip constraint will still hit us.”

Third-quarter profit came to 51 cents a share excluding some items, beating 27-cent average of analysts’ estimates, the automaker said. Revenue amounted to $35.7 billion, topping projections. The results marked the sixth consecutive quarter Ford has beaten analysts’ estimates, according to Dan Levy, an analyst with Credit Suisse. 

Shares rise

Ford shares rose as high as $17.17 in early trading Thursday after closing Wednesday at $15.51. The stock has more than doubled since Farley became CEO a year ago. Earlier Wednesday, General Motors beat third-quarter estimates but cautioned the chip shortage that has held back vehicle production may linger well into 2022. On Thursday,