Ford reported its financial results for the third quarter this week and blew expectations as surprisingly consumers were buying up trucks during the pandemic.
Both the top and bottom beats were on stronger-than-expected demand during the coronavirus pandemic.
For the third quarter, the Michigan-based automaker reported adjusted EPS of 65 cents compared to only 19 cents expected according to average analysts’ estimates per Refinitiv.
Revenue at $34.71 billion was also ahead of the $33.51 billion that was expected per Refinitiv.
In his first quarterly earnings call with analysts as CEO, Jim Farley promised Wall Street greater transparency. Farley replaced former CEO Jim Hackett on Oct. 1st.
“My commitment to each of you is transparency, including purposeful, measurable key performance indicators so you can objectively track our progress,” he told analysts. Farley said additional information, including financial targets, will be discussed in the spring.
The company more than doubled its adjusted pretax earnings from a year earlier to $3.6 billion in the third quarter. Net profit was $2.34 billion, up from roughly $423 million a year earlier.
Its total revenue also increased by about $500 million to $37.5 billion from the third quarter of 2019.
The company ended the third quarter with cash of nearly $30 billion and total liquidity of more than $45 billion after fully repaying $15 billion in revolving credit drawn down in the first quarter in the early days of the pandemic.
“We executed very well this quarter,” Ford CFO John Lawler remarked. “We saw much higher demand than what we expected.”
The profits in the third quarter were led by North American operations which made $3.18 billion on revenue of $25.3 billion.
Looking ahead, Ford has forecast adjusted earnings for the fourth quarter to be between break even and a $500 million loss citing costs related to new or redesigned vehicle launches toward the end of the year.
Ford expects a 100,000 reduction in wholesale shipments of its profitable F-150 pickups in the fourth quarter said Lawler.
There was no word on when the company would reinstate its dividend which was suspended back in March due to the coronavirus pandemic.
Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.