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Ford swung to a profit in its Q1: the stock is still falling

Ford Motor Co (NYSE: F), on Tuesday, said it swung to a profit in its fiscal first quarter. Shares still slid 2.0% in extended trading.

Ford shares down on weakness in Model e

The automotive stock is under pressure because the company’s EV business (Model e) lost $722 million in the recently concluded quarter. On Yahoo Finance Live, Autoblog editor-in-chief Greg Migliore said:

There are so many different players getting into the EV space. The big challenge for Ford and for Jim Farley is to communicate the quality of these vehicles to the marketplace and to the stock market.

Also on Tuesday, the multinational resumed taking orders for the Mustang Mach-E and said its production will ramp up in the back half of 2023. It lowered the price of the all-electric SUV today as well.

Ford shares are now trading roughly at the same price at which they started the year.

Analyst reacts to Ford’s earnings report

Ford Motor Co continues to see its adjusted EBIT to print in the range of $9 billion to $11 billion this year, as per the earnings press release. Still, RBC analyst Tom Narayan says:

Where we see most risk is in Ford’s expectation that they can hold pricing this year. So far, pricing has remained resilient, but we think affordability could become an increasing headwind.

His $12 price target on Ford shares does not represent a meaningful upside from here. Ford Motor Co expects its adjusted free cash flow to come in at about $6 billion in 2023.

Ford Motor Q1 earnings snapshot

Earned $1.8 billion that translates to 44 cents per share

Reported $3.1 billion of loss in the same quarter last year

Adjusted EPS printed at 63 cents as per the press release

Revenue climbed 20% year-over-year to $41.5 billion

Consensus was 38 cents a share on $34.5 billion revenue

Earlier this year, Ford was reported working with a Chinese supplier on a battery factory (source).

The post Ford swung to a profit in its Q1: the stock is still falling appeared first on Invezz.

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