Ford beats on earnings and revenue as operating income surges

Ford CEO Jim Farley at the company’s Dearborn, Michigan, plant where it’s building the electric F-150 Lightning on April 26, 2022.

The company's adjusted operating income more than tripled from a year ago, as it was able to overcome supply chain disruptions to deliver more of its hottest new products to customers.

The other numbers are here.

• Adjusted earnings per share: $0.68, up from $0.12 in the second quarter of 2021. Wall Street analysts polled by Refinitiv had expected $0.45, on average.
• Automotive revenue: $37.91 billion, up from $24.13 billion in the second quarter of 2021. Analysts had expected $34.32 billion, on average, according to Refinitiv.
• Net income: $667 millionversus $561 million in the second quarter of 2021.
• Adjusted earnings before interest and tax (EBIT) margin: 9.3%,versus 3.9% in the second quarter of 2021

After the news was out, Ford's shares were up over six percent.

The company was able to build more of the popular models for its U.S. dealers as a result of the 8% year-over-year increase in sales of Ford-brand SUVs. The good news for the company was that incremental SUV sales replaced the less-profitable car models.

The company said that inflation, specifically, higher prices for key commodities and transportation, offset those gains.

The CFO of Ford said that the company is sticking to its previous guidance. Free cash flow is expected to be between $5.5 billion and $6.5 billion, representing 15% to 25% growth from last year.

Ford is aiming for a total company adjusted EBIT margin of 10% and an 8% EBIT margin from its EV by the end of the decade.

Ford said that its shipments in Europe were up 22% from a year ago due to supply chain improvements and strong demand for its commercial vehicles. In the second quarter of this year, Ford's wholesale shipments in China were down 25%, to about 114,000 vehicles.

Ford is in the middle of a major restructuring and is devoting more resources to electric vehicles. The results for Ford Blue, Ford Model e, and Ford Pro will be reported next year.

Ford said last week that it has secured 100% of the battery supplies it will need to deliver electric vehicles at a rate of 600,000 per year by the end of the decade.