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Wednesday, 28 April 2021 22:20

Ford Reports 1Q Net Income of $3.3B, Best in a Decade

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First-quarter operating improvements around the globe, customer receptivity to new products and Ford’s skillful management of the effects from a worldwide semiconductor shortage contributed to one of its strongest operating performances in years.

“Our team is relentlessly executing our plan to turn around our automotive business so that we can create and deliver the high-value, always-on experience that our Ford and Lincoln customers deserve,” said Jim Farley, Ford’s president and CEO. “There’s no question we’re becoming a stronger, more resilient company.”

 

Ford's first-quarter revenue increased to $36.2 billion, producing net income of $3.3 billion, its best since 2011, and record adjusted EBIT of $4.8 billion.

 

Quarterly adjusted EBIT (earnings before interest and taxes) of $4.8 billion included a noncash gain of $902 million on Ford’s investment in Rivian. The gain, from Rivian’s Series F funding round in January, was factored into 2021 guidance Ford provided in early February.

 

Adjusted EBIT additionally benefited from robust customer demand for the company’s new products, tight vehicle inventories and favorable year-over-year cost performance.

 

The strength of Ford’s first-quarter results was geographically broad-based, with automotive EBIT outside North America totaling $454 million, compared with a loss of $526 million last year.

 

Reported first-quarter cash flow from operations was $4.5 billion. Despite the strong quarterly adjusted EBIT, adjusted free cash flow was negative $396 million, primarily reflecting the temporary effects of adverse timing differences and higher inventory as a result of the global
semiconductor shortage.

 

Ford CFO John Lawler said semiconductor availability, which was exacerbated by a fire at a supplier plant in Japan in March, will get worse before it gets better. Currently, the company believes the issue will bottom out during the second quarter, with improvement through the remainder of the year.

 

In the meantime, he said the company’s attention is on...


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