Profit forecast, EV losses in focus

Ford (F) will report third-quarter results after the bell on Monday, after rival GM posted a blowout third-quarter result and raised its profit forecast for the third time of the year. Ford is also in the spotlight as investors eye any update to its loss-making electric vehicle business.

For the quarter, Ford is expected to report revenue of $41.2 billion, down from $47.8 billion last quarter and down from $43.8 billion a year ago Year. Ford is also expected to report adjusted earnings per share of $0.49 on EBITDA (earnings before interest, taxes, depreciation and amortization) of $3.64 billion.

As part of its Ford+ plan, Ford divided its business into three units: Ford Blue for the traditional gasoline engine business, Ford Model e for the EV division, and Ford Pro for the commercial and super truck business. For the third quarter, analysts expect the following:

• Ford Blue: $24.63 billion in sales

• Model e: $1.42 billion in sales

• Ford Pro: $15.28 billion in sales

The Ford Pro has been the highlight for the automaker as the commercial unit's profits in recent quarters have significantly outperformed the Ford Blue's traditional gasoline-powered vehicle business. On the other side is Ford's Model e-EV unit, which lost another $1.14 billion in EBIT last quarter and is expected to lose $5.5 billion in 2024.

That being said, Ford's electric vehicles have been selling. Ford's third-quarter U.S. deliveries reported earlier this month rose 4.3% year-over-year to 504,039 vehicles, but are still below the 536,050 vehicles delivered last quarter. Ford said electric vehicle sales rose 12% year-over-year, driven by the Ford Lightning pickup and Ford E-Transit van. Ford hybrid vehicles, led by the Maverick pickup, rose 38% year-over-year.

For investors, changes to Ford's full-year 2024 guidance will be top of mind. In the most recent quarter, Ford maintained its current full-year adjusted EBIT of $10 billion to $12 billion, but increased its adjusted free cash flow guidance by $1 billion to $7.5 billion to $8.5 billion.

GM, on the other hand, has raised its guidance every quarter this year and now expects adjusted EBIT of $14 billion to $15 billion (previously $13 billion to $15 billion), among other metrics.

GM also announced $16 billion in stock buybacks and repurchases last year, while Ford has not yet done so.

Ford's electric vehicle business will remain in the spotlight. Ford CEO Jim Farley and his team predict $5.5 billion in electric vehicle losses. Whether the company can see improvements in this area will be closely monitored.

Conversely, GM forecasts it will achieve EV profitability on a positive variable margin basis by the end of this year, while Ford said it only expects to achieve true profitability with the introduction of its second-generation EVs. Ford will provide a comprehensive update on its electric vehicle business outlook and profitability in the first half of next year.

The story continues