Ford shares fall on expectations of higher EV losses; Morgan Stanley expects 'major changes' to EV strategy
(Updated - July 28, 2023 6:22 AM EDT)
Investing.com -- Ford Motor lifted its guidance Thursday after reporting second-quarter results that topped Wall Street expectations
Still, Ford Motor Company (NYSE: F) shares fell nearly 2% in pre-open Friday after the company said it expects to see losses from electric vehicles (EVs) hit $4.5 billion this year, up from the prior forecast of $3B.
“The transition to EVs is happening, it just may take a little longer,” CFO John Lawler said.
“It will be a little slower than the industry expected,” he added.
The automotive company announced EPS of 72 cents on revenue of $45B. Analysts polled by Investing.com anticipated EPS of 53 cents on revenue of $43.04 billion.
Looking ahead, the company lifted its full-year 2023 adjusted EBIT to between $11 billion to $12 billion from $9 billion to $11 billion previously.
The company also raised its expectations for full-year adjusted free cash flow to between $6.5 billion and $7 billion, with capital expenditures of between $8 billion and $9 billion.
While Ford Model e - the business segment which hosts EV operations - saw a negative forecast revision, Ford raised Ebit projections for its two other segments - Ford Blue and Ford Pro.
Morgan Stanley analyst Adam Jonas said the company's legacy ICE business fueled a solid beat.
"We expect major changes to Ford’s EV strategy may be necessary," he said in a note.
Evercore ISI analyst Chris McNally commented:
"Ford had a VERY high Q2 “beat & raise” bar post-GM and they certainly hurdled it on near-term numbers…the debate will remain, though, to what extent investors will question “peak vs plateau” legacy pricing as well as incorporate a more difficult EV transition."
Additional reporting by Senad Karaahmetovic