DEARBORN, MI (WWJ) -- The high cost of scrapping electric vehicle programs led to a $1.3 billion second quarter loss at Ford Motor Co., but the company says their overall performance was good enough to raise their guidance for full year earnings.
“We delivered another strong quarter and raised our full-year guidance, but the more important story is the growing evidence that Ford is becoming a more profitable, more disciplined and genuinely different company,” said Ford President and CEO Jim Farley.
Ford earned $2.5 billion pre tax in the quarter, and raised its guidance by roughly a billion dollars. It now expects to make between $10 billion and $11 billion for the full year.
The earnings report reflects the $3.6 billion it cost to scrap a Kentucky battery joint venture. That led to the bottom line loss. This is part of an ongoing effort to deal with the costs of changing electric vehicle strategies.
The decision to raise guidance came from a market that is much stronger than many had been predicting.
“Our Ford consumer has been very resilient, despite inflation, despite what we’re seeing in interest rates,” said Ford Chief Financial Officer Sherry House.
Revenues at Ford were off by about nine percent, to $48.3 billion. House blames discontinued products and production disruptions caused by a fire at an aluminum supplier.
Tariff costs remain high, but refunds are coming in faster than expected.
“We consider it part of our base business, and we are managing it and mitigating it accordingly,” said House.
Ford Pro, the commercial vehicle business, again led the way with $1.7 billion in pre-tax earnings. The gasoline powered vehicle business, Ford Blue made $1.1, billion. Ford Model E, which is responsible for electric vehicles, lost $919 million.
It was a quarter of progress for Farley. “Our iconic trucks, off-roaders and hybrids are commanding real pricing power; our quality is now industry-leading in the U.S.; and profitable new adjacencies, such as Ford Energy, are opening fresh sources of growth.”
