Ford Stock Offers Early Entry, Special Dividend As Earnings Double Estimates

Ford Stock Offers Early Entry, Special Dividend As Earnings Double Estimates

Ford Motor (F) gave a robust 2024 outlook late Tuesday after posting far stronger-than-expected earnings for a fourth quarter marred by the autoworkers’ strike. Ford stock popped above a long-term level Wednesday, offering an early entry.

In an earnings release, Ford CFO John Lawler highlighted robust cash generation, with the company targeting payouts of 40% to 50% of free cash flow.

For the current first quarter, the automaker declared regular of 15 cents per share and a special dividend of 18 cents per share, payable March 1 to shareholders at the close of Feb. 16.




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Ford Earnings

Estimates: Analysts, on average, expected earnings per share to decline 73% to 12 cents, according to FactSet. Revenue was seen falling 2%, year over year, to $43.062 billion.

The United Auto Workers strike against Ford, General Motors (GM) and Stellantis (STLA) ended Oct. 30, with the auto giants making costly concessions.

Results: Ford earnings of 29 cents per share, down 43% and marking the first decline in five quarters, were more than double the 12 cents that analysts were expecting. Revenue of $46 billion, up 4% vs. expectations for a decline.

Ford Blue, the company’s gas- and hybrid-vehicle business, delivered Q4 earnings before interest and taxes (EBIT) of $813 million.

Ford Model e, the all-electric vehicle unit, lost $1.57 billion during the quarter, “reflecting an extremely competitive pricing environment,” the earnings release said.

Ford Pro, the commercial vehicle unit, produced EBIT of $1.811 billion in the quarter.

The balance sheet showed about $29 billion in cash and $46 billion in liquidity at year end.

Outlook: The automaker late Tuesday guided full-year 2024 adjusted EBIT of $10 billion-$12 billion, with the midpoint of $11 billion well above FactSet consensus views for $9.650 billion. It also forecast  free cash flow (FCF) of $6 billion-$7 billion.

Archrival GM on Jan. 30 provided bullish outlook as well.

Ford Stock Performance

Shares of Ford Motor surged 5.9% to 12.78 in early trade on the stock market today. F stock pared gains to 12.31 in morning trade.

Ford stock jumped above its 200-day moving average Wednesday, briefly clearing a short-term high of 12.50. It’s also flirting with a longer-term trendline. All of those could offer an early entry for risk-tolerant investors. The stock’s 50-day average is rising but remains below the 200-day line for now.

GM stock and STLA stock also rose. Stellantis reports for Q4 on Feb. 15.

Toyota stock spiked 7.8% Tuesday and extended gains Wednesday. Toyota Motor (TM) on Tuesday forecast a record $30.3 billion net profit for the fiscal year ending March, thanks to higher global sales of hybrid vehicles. The move put TM stock almost 14% above a 194.43 buy point after a breakout in January.

Tesla stock staged a modest rebound Tuesday and eased Wednesday, still near multi-month lows.

Hybrid EVs Rise, Battery EVs Slow

Legacy automakers continue to pare back their big bets on “pure” or battery electric vehicles (BEVs). They report growing demand for hybrid vehicles, while industrywide BEV sales growth has slowed.

Hybrid vehicles made up 13% of Ford Blue’s U.S. volume last year. Those included gas-electric versions of the flagship F-150 and smaller Maverick pickups. “We’re expecting double-digit hybrid growth again in 2024,” the Ford earnings release said Tuesday.

In January, Ford’s hybrid EV sales continued to power its overall new vehicle sales, continuing the momentum seen in the final quarter of 2023.

Amid record hybrid sales, Ford’s 2023 sales in the U.S. market totaled 1,995,912 vehicles — up 7% over 2022 and the best since 2020, capped by a slight Q4 gain despite the labor strike. Combustion vehicles still made up 90% of total 2023 sales.

While many customers are interested in buying BEVs, they are unwilling to pay premiums for them over gas or hybrid vehicles, industry watchers say. That has hurt BEV prices and profitability, Ford has said.

GM is now bringing back hybrid vehicles, hedging its earlier pursuit of all-electric vehicles.

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