Ford revenue falls while adjusted operating profit rises
Ford increased adjusted operating profit while third-quarter revenue declined. Management attributed the improvement to higher-margin vehicles and cost control, with software services and parts adding record revenue. The US automaker narrowed its annual earnings range and reported positive adjusted free cash flow. Its outlook remains tied to assumptions about production, inflation and economic conditions.
Economics & Markets··Midday
Lower sales accompany higher adjusted earnings
Ford, the US vehicle manufacturer, released third-quarter financial results on October 28. Its revenue declined from a year earlier while adjusted earnings before interest and taxes increased. The company also updated its full-year earnings outlook following the quarter.[1], [2]
Revenue was 49.5 billion dollars, down 2 percent. Adjusted earnings before interest and taxes increased 3 percent to 2.7 billion dollars. Chief Financial Officer Sherry House attributed that improvement to higher-margin vehicles accounting for a stronger share of sales and to cost control. House identified Tremor and other off-road trims as examples of the product mix supporting earnings.[1]
Software and parts bring record revenue
According to House, higher-margin off-road vehicles now represent approximately a quarter of Ford's US sales. Software services and the parts business each achieved record quarterly revenue. BlueCruise and Connectivity, Ford's driving-assistance and connectivity services, were named as major contributors. The company described software, parts, repairs and financing as ways to extend relationships with customers beyond the original vehicle sale.[1]
Ford reported 4.7 billion dollars of adjusted free cash flow and total liquidity above 46 billion dollars. New capacity for Super Duty pickup production was operating at the Oakville Assembly Complex. In its energy business, management retained a plan to bring 20 gigawatt-hours of annual capacity online by the end of 2027 and reach the full-capacity run rate in the third quarter of 2028.[1]
Annual earnings range narrows
Management narrowed annual adjusted earnings before interest and taxes guidance to 10.5 billion dollars to 11 billion dollars, describing it as the third improvement during the year. The range incorporates the planned timing of investment. Ford also reiterated its target of an 8 percent adjusted operating margin in 2029. The annual outlook assumes no material change in inflation, logistics, production or macroeconomic conditions. It excludes new tariffs or policy changes announced after the review date. The outlook also excludes the potential effects of a material US economic downturn.[1]
