/Ford beats Wall Street estimates, maintains 2021 guidance amid chip shortage – CNBC

Ford beats Wall Street estimates, maintains 2021 guidance amid chip shortage – CNBC


Ford CEO Jim Farley takes off his mask at the Ford Built for America event at Fords Dearborn Truck Plant on September 17, 2020 in Dearborn, Michigan.

Nic Antaya | Getty Images

DETROIT – Ford Motor beat Wall Street’s expectations for the first quarter and maintained its 2021 guidance despite an ongoing semiconductor chip shortage that has depleted vehicle inventories and caused the company to shutter some of its factories.

Here’s how Ford did compared with what Wall Street expected based on average estimates compiled by Refinitiv.

  • Adjusted earnings: 89 cents versus an expected 21 cents
  • Automotive revenue: $33.55 billion versus $32.23 billion

The company anticipates its full-year adjusted pretax profit to be between $5.5 billion and $6.5 billion, including an adverse effect of about $2.5 billion from the semiconductor issue. Adjusted free cash flow for the full year is projected to be $500 million to $1.5 billion.

The company had estimated it would earn between $8 billion and $9 billion in adjusted pretax profits. That didn’t factor in the shortage in semiconductor chips that it said could lower earnings by $1 billion to $2.5 billion this year.

Ford CFO John Lawler said semiconductor availability will get worse before it gets better. Largely because of the additional effect of the supplier fire in Japan, Ford said it now expects to lose about 50% of its planned second-quarter production, up from 17% in the first quarter.

Lawler, in a press release, said the automaker believes that the semiconductor issue will bottom out during the second quarter, with improvement through the remainder of the year.

The lower vehicle inventories and lack of production have led to higher profits per vehicle for automakers, but is expected to cost the global auto industry $60.6 billion in revenue, according to consulting firm AlixPartners.

Shares of Ford were down nearly 3% during afterhours trading. The company’s market cap is more than $48 billion.

This is breaking news. Please check back for updates.

Correction: Ford maintained its guidance for 2021. A previous version of the story misstated the guidance.

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