Home News Ford Stock Rises on Strong Q4 Earnings and 2024 Outlook, Special Dividend News

Ford Stock Rises on Strong Q4 Earnings and 2024 Outlook, Special Dividend News

by SuperiorInvest

Key takeaways

  • Ford reported adjusted earnings per share of 29 cents, more than double analyst expectations, and projected 2024 earnings at the high end of forecasts.
  • Ford also announced a special dividend of 18 cents per share to be paid in the first quarter.
  • Losses in the company’s electric vehicle business continued to rise and are expected to continue rising in 2024.
  • Ford shares rose more than 6% in after-hours trading.

Shares of Ford (F) rose more than 6% in after-hours trading Tuesday after the company reported better-than-expected fourth-quarter earnings, projected strong earnings for 2024, and announced plans to return more cash to shareholders. .

Ford posted earnings per share of 29 cents, down from 51 cents per share a year earlier but more than double analyst expectations. Fourth-quarter revenue rose 4% to $46 billion, also beating expectations.

For 2024, Ford forecast adjusted earnings of between $10 billion and $12 billion before interest and taxes, compared with $10.4 billion in 2023. Those projections are at the high end of the $10 billion to $10.5 billion it forecast. the company predicted in November, when it was hampered by a six-week strike by the United Auto Workers union.

The company projects profits this year of between $8 billion and $9 billion at its Ford Blue unit, which comprises hybrid and gasoline vehicles. It sees profits of between $7 billion and $7.5 billion in its Ford Pro commercial business.

However, the company said its relatively small Ford Model e electric vehicle business is likely to post a loss of between $5 billion and $5.5 billion as pricing pressures in the electric vehicle market continue to weigh on profitability. . Losses from Ford’s investment-intensive electric vehicle unit have risen steadily over the past year and amounted to $4.7 billion in 2023.

Ford noted in its press release that “widespread customer adoption of electric vehicles is occurring at a slower pace than the industry expected” and reiterated that the company is “deferring certain capital investments in electric vehicles until that are justified by demand and the prospects for an acceptable level”. returns.”

However, according to Chief Financial Officer John Lawler, Ford is developing next-generation electric vehicles that the company expects to be profitable within a year of their launch. “Electric vehicles are here to stay, customer adoption is growing and their long-term advantage is critical for Ford,” he said.

Ford also announced a first-quarter regular dividend of 15 cents per share plus a final dividend of 18 cents, to be paid on March 1. The company said it is targeting shareholder distributions of 40% to 50% of adjusted free cash flow, which the automaker expects to be between $6 billion and $7 billion in 2024.

Ford shares gained 6.3% to $12.83 in after-hours trading. Through Tuesday’s close, the stock was down about 10% over the past year.

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