Ford surpasses earnings expectations in Q1, predicts full-year profit to reach high-end of projections

**Introduction**

Ford reported first quarter results after the bell on Wednesday that exceeded expectations, with its focus on gas and hybrid offerings, as well as changes to its product game plan, taking center stage. The company’s revenue of $42.8 billion and adjusted earnings per share of $0.63 beat estimates, showing a 3% increase compared to the previous year. Ford also provided guidance metrics for adjusted earnings before interest and taxes (EBIT) and free cash flow (FCF), raising expectations across the board. This article will delve into Ford’s first quarter performance, its strategic positioning in the market, and its outlook for the future.

**Changing Product Game Plan**

Ford divided its business into three units last year: Ford Blue for gas-powered autos, Model e for EVs, and Ford Pro for commercial and super duty trucks. In Q1, Ford Blue reported revenue of $21.8 billion with an EBIT of $905 million, while Model e had $100 million in revenue but an EBIT loss of $1.32 billion, and Ford Pro generated $18.0 billion in revenue with an EBIT of $3.01 billion. The company has been pushing deeper into gas and hybrid vehicles, delaying EV production and launch timelines for upcoming models.

**Focus on Gas and Hybrid Offerings**

During the first quarter, Ford prioritized its gas and hybrid offerings, with a focus on hybrid vehicles like the Maverick pickup and the new F-150 with a hybrid powertrain. US deliveries in Q1 increased by 6.8% to 508,083 vehicles, driven by strong sales of electrified products, including hybrids. Ford’s Maverick hybrid pickup saw sales soar by 77% in the first quarter, contributing to a 42% jump in overall hybrid sales. The company’s EV portfolio also performed well, with an 82% increase in total EV sales, although heavy discounting and incentives were used to boost sales.

**Challenges with Flagship F-150**

While Ford’s EV offerings showed strong performance, its flagship F-150 experienced a 10.2% decline in sales in the quarter, totaling 152,943 units. The slow ramp-up of the all-new F-150 impacted sales, despite it remaining America’s top-selling truck. Ford is working to address challenges with its F-Series lineup to drive growth and maintain its leadership position in the market.

**Outlook and Strategic Vision**

Ford’s full-year adjusted EBIT is on track to meet the high end of the $10 billion to $12 billion range, with adjusted FCF increasing to $6.5 billion to $7.5 billion. The company’s strategic focus on gas and hybrid offerings, along with its evolving product game plan, position it for long-term success in the constantly changing automotive landscape. Ford’s commitment to innovation, quality, and value underscores its vision to lead the industry and meet customer demands effectively in the future.

**Conclusion**

In conclusion, Ford’s first quarter results reflect its strong performance driven by a focus on gas and hybrid offerings, as well as strategic changes to its product game plan. Despite challenges with flagship F-150 sales, the company’s EV and hybrid portfolio showed encouraging growth. Ford’s outlook for the full year remains positive, with adjusted EBIT and FCF targets raised to meet increasing market demands. As Ford continues to adapt to evolving consumer preferences and technological advancements, its strategic vision and commitment to innovation position it well for sustained success in the competitive automotive market.

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