Ford Motor Co on Wednesday posted a better-than-expected quarterly profit on strong U.S. demand for pickups and SUVs, and forecast a full-year pretax profit instead of a loss, boosting shares in after-hours trading. Ford CEO Jim Farley, who took over on Oct. 1, is tasked with completing the No. 2 U.S. automaker's $11 billion restructuring begun under his predecessor, Jim Hackett, and has promised greater urgency.
He has also said he is keen to expand Ford's operations into related technology fields, including software, data, fleet management and electric vehicle charging. Ford reported net income in the third quarter of $2.4 billion, or 60 cents a share, compared with $400 million, or 11 cents a share, a year earlier.
Excluding items, Ford's profit was $3.6 billion, or 65 cents a share, topping the 19 cents analysts polled by Refinitiv had expected. The company said it now anticipates better-than-expected fourth-quarter results, as well as a full-year pretax profit of between $600 million and $1.1 billion.
Ford said in July that it expected a pretax profit of between $500 million and $1.5 billion in the third quarter and a loss for the fourth quarter as well as for the full year. In a conference call on Wednesday, Farley said: "We haven't fixed the issues that have held us back in our automotive business." But he added that his leadership team has "a clear turnaround plan."
The automaker fully repaid $15 billion in revolving credit loans and ended the quarter with nearly $30 billion in cash and more than $45 billion of liquidity. The company's adjusted EBIT margin in the quarter was 9.7%, with a full-year target of 8%. Ford's net margin in the period was 6.4%.
Ford began building the redesigned F-150 and the new Mustang Mach-E and Bronco Sport this month. The new full-size truck goes on sale next month, and along with the commercial business is key to Ford's growth strategy. Farley said electric vehicles, including battery-powered variants of the F-150 pickup and Transit van, were "fundamental" to the company's future, including the Lincoln line and Ford's commercial vehicle business.
Ford shares were up 3.8% at $8.00 in extended trading, paring gains from an initial rise of 7% after hours. Credit Suisse analyst Dan Levy in an earnings note said, "We expect the stock to outperform near-term; indeed, we believe Jim Farley will drive incremental urgency and accountability at Ford."
"We saw much higher demand than we expected," Chief Financial Officer John Lawler told reporters on the conference call. "We also saw higher net pricing, particularly in North America."
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