Ford Electric Vehicles Show Surprise Q2 Earnings Despite Losses

First Quarter Performance After Organizational Restructuring
Both Revenue and Net Profit Exceed Market Expectations

U.S. automaker Ford Motor Company posted a surprise second-quarter performance that exceeded market expectations, reflecting the full impact of its organizational restructuring. However, losses in the electric vehicle (EV) segment are expected to widen more than anticipated due to a sharp decline in sales.

On the 27th (local time), Ford announced through a public disclosure that it recorded $45 billion (approximately 57.7 trillion KRW) in revenue for the second quarter. This represents a 12% increase from $40.2 billion in the same period last year, significantly surpassing the market forecast of $40.2 billion. Net income surged nearly threefold to $1.92 billion from $700 million a year earlier. Earnings per share (EPS) stood at $0.72, beating the market estimate of $0.54.

The strong second-quarter results were driven by increased commercial vehicle sales. Ford’s vehicle sales in Q2 rose 9.9% year-over-year, with truck and sport utility vehicle (SUV) sales notably up by 26.2%. Sales of Ford’s flagship pickup truck, the F-150 line, jumped 34% during this period. The commercial vehicle division (Ford Pro) saw revenue growth of 22% thanks to robust sales. John Lawler, Ford’s Chief Financial Officer (CFO), said during the post-earnings conference call, “Vehicle demand and pricing are holding up better than we expected at the beginning of the year.”

[Image source=EPA Yonhap News]

The electric vehicle division (Ford Model e) posted a net loss of $1.08 billion. Ford’s EV division has seen losses widen each quarter, primarily due to declining sales. Ford’s EV sales in Q2 fell 2.8% year-over-year. Sales of the flagship Mustang Mach-E dropped 21.1%, while sales of the E-Transit electric van plunged 23.8%.

Ford expects to incur a $4.5 billion loss this year from its EV transition, a significant increase from the previously projected $3 billion loss. In its earnings report, Ford stated, “The sustained losses in the EV segment are due to pricing environment, restrained investment in production capacity, and other cost factors.” Following this outlook, Ford’s stock price fell by over 1% in after-hours trading.

CEO Jim Farley said during the earnings call, “The pace of the EV transition will be slower than expected,” but maintained the company’s previous guidance to achieve an 8% return on investment before interest and taxes in the EV business by the end of 2026.

However, reflecting increased demand for commercial and internal combustion engine vehicles, Ford raised its full-year performance targets. The company set its annual revenue target at $11 billion to $12 billion, up from the previous range of $9 billion to $11 billion.

This earnings report marks the first quarter results following Ford’s organizational restructuring, which took place in March. Ford reorganized its business into three divisions: the electric vehicle division ‘Ford Model e,’ the internal combustion engine division ‘Ford Blue,’ and the commercial vehicle division targeting government agencies and corporate customers, ‘Ford Pro.’ Foreign media have analyzed this move as a response to investor pressure demanding company value reassessment and new investment attraction through the spin-off of the EV business.

This content was produced with the assistance of AI translation services.