Ford Motor (NYSE: F) reported Q3 EPS of $0.51, $0.24 better than the analyst estimate of $0.27. Revenue for the quarter came in at $35.7 billion versus the consensus estimate of $33.11 billion.

Outlook:

The underlying strength of Ford’s business, said Lawler, supports an increase in the company’s guidance for full-year 2021 adjusted EBIT to between $10.5 billion and $11.5 billion. Rivian, in which Ford holds an equity stake, has announced that it plans to conduct an initial public offering of shares in the company. In the event Rivian completes an IPO, Ford will record any gain on its investment in Rivian and subsequent adjustments as special items. Accordingly, Ford will recast its pre-IPO non-cash adjusted EBIT gain of about $900 million from the first quarter of 2021 as a special item. Ford’s expectations for fourth-quarter adjusted EBIT assume an increase in wholesale shipments from the third quarter, combined with a continued healthy mix of vehicles sold and net pricing, and continued strong, but sequentially somewhat lower, results from Ford Credit. There is no change in Ford’s guidance for full-year 2021 adjusted free cash flow of $4.0 billion to $5.0 billion. Lawler said Ford typically does not provide next-year financial guidance in October and won’t do so at this point for 2022. Directionally, he said, the company has momentum from and expects to build on its strong performance in 2021. External ambiguities for 2022 could include:  The interplay between semiconductor-related constraints and vehicle volumes and pricing, which are expected to remain dynamic  Likely inflationary effects on direct and indirect costs, including for materials and freight; for example, commodity costs are expected to be up $3 billion to $3.5 billion for full-year 2021, and could increase another $1.5 billion in 2022, and  Strong auction values being moderated by lower lease-end return rates and smaller vehicle inventories, implying lower results – though another solid year – from Ford Credit. “What’s certain is that we’re going to keep investing smartly and heavily in Ford+ – customerfacing technology and always-on relationships, connectivity, and EVs – on top of a foundation that’s broad and deep,” said Lawler. “We believe the long-term value creation from these investments will be substantial.” Ford plans to provide financial guidance for 2022 when it reports fourth-quarter and full-year 2021 financial results on Feb. 3.

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