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Wednesday, 27 October 2021 21:39

Ford Reports $600 Million Drop in Q3 Net Income Compared to a Year Ago

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Ford on Oct. 27 reported $1.8 billion in net income for the third quarter of 2021, down from $2.4 billion reported in the same quarter a year ago.

However, Ford’s revenue, net income, adjusted earnings before interest and taxes (EBIT), cash flow from operations, and adjusted free cash flow were all sharply higher from the second to the third quarter of 2021, driven by significant increases in semiconductor availability and wholesale vehicle shipments from Q2.

 

“This is the most exciting Ford lineup I’ve seen, but what matters is that customers love our new products and services---and we’re just getting started,” said President and CEO Jim Farley. “The trajectory of our business gives us huge confidence in Ford+ [plan for growth and value creation], and we’re obsessively turning the plan’s promise into reality.”

 

Third-quarter revenue of $35.7 billion was down from the $37.5 billion reported in the same quarter a year ago. Semiconductor availability remains a challenge, but markedly improved from the second quarter, propelling sequential increases in wholesale shipments and revenue of 32% and 33%, respectively.

 

Ford’s adjusted EBIT was $3.0 billion, down from $3.6 billion in Q3 2020. Third-quarter cash flow from operations was $7.0 billion and adjusted free cash flow was $7.7 billion, both up considerably from the second quarter largely because of the higher wholesales and profitability.

The company ended Q3 with $31.5 billion of cash and $47.4 billion in total liquidity.

 

Improvement in semiconductor supplies in North America in the third quarter helped lift regional product shipments 67% from Q2. That increased volume pushed the business unit’s EBIT margin to 10.1%. Through the first three quarters of 2021, North America’s EBIT margin was 9.0%, approaching the full-year 2023 regional target of 10%.

 

Ford remains what Farley calls “spring loaded” for growth in North America as semiconductor volumes increase, with a 50% sequential increase in orders---to more than 100,000---for vehicles already on the market, excluding those for the all-new Bronco.

 

Ford Credit achieved another exceptional quarter with...


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