Ford says chip scarcity to halve second-quarter car output, however might ease this summer time By Reuters
© Reuters. FILE PHOTO: Ford Motor Co. CEO Jim Farley walks to talk at a information convention on the Rouge Complicated in Dearborn, Michigan
By Ben Klayman and Paul Lienert
DETROIT (Reuters) – Ford Motor (NYSE:) Co on Wednesday stated it expects a worldwide semiconductor scarcity might ease this summer time however will not be absolutely resolved till 2022, because the automaker reported a powerful first-quarter revenue however stated the scarcity could slash second-quarter manufacturing by half.
Ford stated the continued chip scarcity would price it about $2.5 billion and about 1.1 million models of misplaced manufacturing in 2021.
The No. 2 U.S. automaker handily beat Wall Road’s revenue estimate for the quarter, incomes 81 cents a share, in contrast with the consensus 21 cents, in keeping with Refinitiv IBES knowledge. In final yr’s first quarter, the corporate misplaced 50 cents a share.
Ford shares had been down 2.9% in after-hours commerce on Wednesday.
Ford Chief Govt Jim Farley informed analysts: “There are extra whitewater moments forward for us that we now have to navigate. The semiconductor scarcity and the influence to manufacturing will worsen earlier than it will get higher. The truth is, we consider our second quarter would be the trough for this yr.”
Chief Monetary Officer John Lawler stated Ford’s outlook was pushed largely by a manufacturing unit hearth suffered by Japanese chipmaker Renesas. The circulate of chips from Renesas is anticipated to be restored in July, however the international scarcity of automotive semiconductors will not be absolutely resolved till subsequent yr, Lawler stated.
Ford stated its internet revenue of $3.3 billion was the most effective since 2011, and adjusted pre-tax revenue was a document $4.8 billion, together with a $900 million non-cash acquire on its funding in Rivian, the electrical car start-up. Ford misplaced $2.0 billion within the first quarter of 2020.
The corporate stated the chip scarcity will slash full-year earnings earlier than curiosity and taxes to $5.5 billion-$6.5 billion.
In February, CFO Lawler stated the corporate was heading in the right direction to earn $8 billion to $9 billion in adjusted EBIT.
Income within the quarter elevated to $36.2 billion, from $34.3 billion a yr earlier.
Ford was in a position to offset a few of the influence of misplaced manufacturing on this yr’s quarter by boosting the common transaction value per car offered to just about $48,000, in contrast with simply over $44,000 a yr in the past, in keeping with analysis agency Edmunds.com.
Ford sellers had been in a position to command larger costs due to chip-induced shortages of common fashions, such because the best-selling F-150 pickup.
Lawler stated Ford sooner or later could persist with leaner inventories of F-150 and different fashions “as a result of it is a greater option to run our enterprise.”
Abroad, Ford reported income in Europe up 13% to $7.1 billion, and $341 million in pre-tax revenue, reversing a year-ago loss.
Income climbed 39% to $800 million in China, the place Ford narrowed its loss to $15 million, in contrast with a lack of $241 million a yr earlier.
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