Ford CEO Jim Farley at the company’s new Rouge Electric Vehicle Center on May 18, 2021 ahead of President Joe Biden’s remarks.
Michael Wayland / CNBC
DETROIT – Ford Motor said Thursday its adjusted pre-tax earnings for the second quarter will “exceed expectations” and significantly better than a year ago, while net income will be “significantly lower” than the same period last year.
The company released the general forecast ahead of a presentation by Ford CEO Jim Farley at Deutsche Bank’s global automotive industry conference on Thursday afternoon.
“The improvement in the automotive sector is being driven by lower than expected costs and favorable market factors,” the company said in a press release. “In addition, Ford Credit will benefit from higher vehicle auction values.”
The automaker’s shares rose about 3% ahead of the market open on Thursday.
Ford said Farley will tell conference attendees that the automaker has seen an improvement in its automotive business since the full-year forecast was released on April 28, despite ongoing uncertainty over shipments of semiconductor chips used in infotainment and other systems used to build Cars are used.
Ford had previously announced that it would lose about 50% of its planned production in the second quarter due to the scarcity, up from 17% in the first quarter.
In April, Ford projected its adjusted pre-tax profit for the full year to be between $ 5.5 billion and $ 6.5 billion, including a negative impact of about $ 2.5 billion from the semiconductor problem. Adjusted free cash flow for the full year was projected to be between $ 500 billion and $ 1.5 billion.
The first half of the year went better than many expected for automakers like Ford. Delivery bottlenecks due to the parts problem have resulted in higher vehicle prices and profits.
Ford said net income for the second quarter is expected to be significantly lower than a year ago when results included a $ 3.5 billion gain on an investment in its Argo AI self-driving unit with Volkswagen. The company reported net income of $ 1.1 billion in the second quarter of last year.
Ford’s comments come a day after General Motors announced it expected adjusted pre-tax profit of $ 8.5 billion to $ 9.5 billion for the first half, up from an estimated $ 5.5 billion.
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