Ford Posts $3.1 Billion First-Quarter Loss, Maintains 2022 Outlook

Ford Motor Co.

F -3.64%

swung to a web loss of $3.1 billion in the 1st quarter, a reversal largely driven by a steep loss in valuation of its stake in electric-automobile startup

Rivian Automotive Inc.

The Dearborn, Mich., automobile maker stood by its calendar year-conclude steering of pretax profit of $11.5 billion to $12.5 billion in 2022, inspite of ongoing issues securing enough car areas to maintain assembly traces thoroughly working. The quarterly loss compares with a internet profit of $3.3 billion in the 1st quarter of 2021.

Revenue dropped 5% to $34.5 billion in the very first quarter, reflecting decrease production. A semiconductor lack that has dragged on for a lot more than a yr proceeds to stifle Ford’s manufacturing unit output, resulting in downtime at various plants throughout the quarter and hindering initiatives to restock loads with sufficient cars to fulfill customer desire.

First-quarter functioning revenue excluding 1-time goods was $2.3 billion, or 38 cents a share, edging previous analysts’ expectations of 37 cents a share. Even now, running revenue was down from the $3.9 billion recorded in the prior-12 months period of time.

“The capacity of this organization is a lot more robust than what we ended up capable to present in the quarter,” reported

John Lawler,

Ford’s chief economic officer.

Ford shares have been around flat in after-several hours buying and selling. The inventory shut Wednesday at $14.85 a share.

An early investor in Rivian, Ford had earlier benefited from a article-IPO surge in the startup’s valuation. In 2021, Ford stated the increase in Rivian’s stock rate resulted in a $8.3 billion paper get. But shares of Rivian and other EV startups have fallen in modern months as early trader enthusiasm waned and executives slashed creation projections. Rivan’s inventory has fallen just about 70% considering the fact that the get started of the 12 months.

Ford explained Wednesday its weaker quarterly effects have been mainly attributed to a $5.4 billion mark-to-sector decline on its Rivian expenditure.

The vehicle industry’s outlook grew progressively uncertain through the quarter, a time period in which the Ukraine war and pandemic-related restrictions in China have even further disrupted automobile production and the provide chain.

Vehicle makers also are confronting inflationary pressures, particularly on main products utilized in manufacturing, these types of as the lithium, cobalt and nickel essential for electric-automobile batteries.

The most recent electric powered cars provide the energy to charge family units or other EVs making use of the energy stored in the car’s battery. WSJ’s George Downs explores how some organizations are building automobile-to-grid technologies that would help electricity to flow from the EV into the electric power grid alone. Illustration: George Downs

Mr. Lawler, the CFO, claimed on Wednesday that Ford raised motor vehicle prices in the first quarter, precisely on the Mustang Mach-E electric SUV, to counteract soaring commodity expenditures. He added that executives see a gradual enhancement in the availability of semiconductors and expects materials to improve in the back 50 % of 2022.

Mr. Lawler stated larger income in the second fifty percent, together with ongoing sturdy pricing as dealership provides continue to be limited, will help the firm in conference its complete-yr steerage.

Standard Motors

claimed a 3% slide in web income for the to start with quarter but stood by its previously year-end steering.

GM claimed buyers are having to pay larger prices for its motor vehicles, but those people gains are currently being offset by bigger commodity and logistical expenses. Individuals expenditures are weighing heavier on the bottom line than in prior quarters, the firm claimed.

A calendar year-and-a-fifty percent into the top task, Ford Main Government

Jim Farley

is trying to shift aggressively into electric motor vehicles and restructure interior operations to far more closely align with newer rivals these types of as

Tesla Inc.

that really don’t have legacy fuel-motor businesses. In March, the business uncovered it was separating its electric powered-car functions from all those devoted to gasoline-motor automobiles, by creating two unique divisions.

In the close to term, Ford is however hoping to get its producing operations back on keep track of after getting rid of all-around 100,000 models of production in the initially 3 months of the calendar year, in accordance to exploration organization AutoForecast Answers.

Ford’s earnings comply with a sturdy demonstrating from Tesla, which final week posted a $3.32 billion revenue in the very first quarter. GM’s quarterly results this week also outpaced analysts’ predictions.

Ford has manufactured several recent expansions into the electrical-vehicle house, which includes options to expend $7 billion for 4 new factories in Tennessee and Kentucky. It also this 7 days commenced building an electric version of its bestselling F-150 pickup truck, a model that will commence at $40,000, undercutting numerous rivals on rate.

The company’s inventory, having said that, has fallen 28.5% this calendar year. The S&P 500 is down 12% considering that Jan. 1.

Ford dealerships are straining to fill their heaps and fulfill still-powerful shopper need. As inventory concentrations continue to be crunched, analysts forecast automobile charges will keep large for the months to appear, serving to to counter soaring fees pressures for vehicle makers.

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Generate to Nora Eckert at [email protected]

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