CFO Lawler to Affirm Full-Year 2024 Operating Guidance, Review Ford+ Growth Plan at BofA Auto Summit Today
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Insights
Ford's reaffirmation of its full-year 2024 operating results, with an EBIT range of $10 billion to $12 billion and adjusted free cash flow of $6 billion to $7 billion, reflects a strong financial outlook, particularly when considering the capital expenditures of $8 billion to $9.5 billion. This guidance suggests a solid balance between investment and profitability, which is often a challenging equilibrium to maintain in the capital-intensive automotive industry. Investors should note the capital allocation strategy in place, as it indicates management's confidence in the company's growth trajectory and operational efficiency.
Moreover, the segmentation of Ford's business units into Ford Blue, Ford Pro and Ford Model e allows for targeted strategies that cater to diverse market segments. This strategic focus could lead to optimized resource allocation and potentially higher margins, especially in the burgeoning electric vehicle (EV) market through Ford Model e. The integration of software-enabled capabilities hints at a value-added approach to EVs, which might create additional revenue streams and enhance customer loyalty.
The Ford+ growth plan's emphasis on a diversified product mix, including gas, hybrid and electric vehicles, is a strategic move to cater to a wide range of consumer preferences and mitigate market risks associated with the transition to electric mobility. The differentiation of business segments under Ford Blue, Ford Pro and Ford Model e is indicative of a tailored marketing approach that could enhance brand positioning and market share in their respective domains.
As the automotive industry shifts towards electrification, Ford's commitment to developing electric vehicles and connected services through Ford Model e is particularly noteworthy. This not only aligns with global environmental trends but also positions Ford as a competitive player in the EV space. The potential for growth in the commercial vehicle segment via Ford Pro should also be monitored, as the demand for efficient fleet management solutions is on the rise.
The Ford+ initiative's focus on reducing cyclicality addresses a perennial concern in the automotive sector, which is prone to economic fluctuations. Ford's proactive approach in diversifying its offerings and investing in emerging technologies such as connected, software-enabled capabilities may provide a buffer against market volatility. This approach also indicates that Ford is not only investing in product development but is also keen on enhancing the customer experience through technology, which could be a differentiating factor in customer retention and acquisition.
Investors should consider the implications of Ford's capital expenditure plans, as they reflect the company's commitment to innovation and growth. The projected figures suggest a significant investment in future capabilities, particularly in the EV segment, which could lead to long-term competitive advantages. However, the substantial investment also carries execution risk and the ability of Ford to deliver on these plans will be important for investor confidence.
That’s the summary of what Ford CFO John Lawler will say today (Tuesday) during fireside-chat remarks at the BofA Securities Auto Summit. Lawler will speak at 12:10 p.m. ET. His comments will be webcast “live” and on replay and a transcript of them will be available afterward, all via shareholder.ford.com.
Lawler will affirm the operating guidance that Ford provided in early February: adjusted earnings before interest and taxes of
He’ll also describe specific achievements within the Ford+ plan and its three distinct, customer-centered business segments: Ford Blue for iconic gas and hybrid vehicles; Ford Pro, with tailored products and services to help commercial customers transform their enterprises; and Ford Model e, which is developing breakthrough electric vehicles along with connected, software-enabled capabilities and experiences that are being applied across the company’s global product lineup.
Ford plans to report first-quarter 2024 financial results on Wednesday, April 24.
About Ford Motor Company
Ford Motor Company (NYSE: F) is a global company based in
Adjusted EBIT and adjusted free cash flow are non-GAAP financial measures. When we provide guidance for adjusted EBIT and adjusted free cash flow, we do not provide guidance for net income or net cash provided by/(used in) operating activities, the respective most comparable GAAP measures, because they include items that are difficult to predict with reasonable certainty. See pages 75-76 of Ford’s Annual Report on Form 10-K for the year ended December 31, 2023, for the definitions of adjusted EBIT and adjusted free cash flow.
Cautionary Note on Forward-Looking Statements
Statements included or incorporated by reference herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by our management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation:
- Ford is highly dependent on its suppliers to deliver components in accordance with Ford’s production schedule and specifications, and a shortage of or inability to acquire key components or raw materials, such as lithium, cobalt, nickel, graphite, and manganese, can disrupt Ford’s production of vehicles;
- To facilitate access to the raw materials and other components necessary for the production of electric vehicles, Ford has entered into and may, in the future, enter into multi-year commitments to raw material and other suppliers that subject Ford to risks associated with lower future demand for such items as well as costs that fluctuate and are difficult to accurately forecast;
- Ford’s long-term competitiveness depends on the successful execution of Ford+;
- Ford’s vehicles could be affected by defects that result in recall campaigns, increased warranty costs, or delays in new model launches, and the time it takes to improve the quality of our vehicles and services could continue to have an adverse effect on our business;
- Ford may not realize the anticipated benefits of existing or pending strategic alliances, joint ventures, acquisitions, divestitures, or business strategies;
- Ford may not realize the anticipated benefits of restructuring actions and such actions may cause Ford to incur significant charges, disrupt our operations, or harm our reputation;
- Operational information systems, security systems, vehicles, and services could be affected by cybersecurity incidents, ransomware attacks, and other disruptions and impact Ford and Ford Credit as well as their suppliers and dealers;
- Ford’s production, as well as Ford’s suppliers’ production, and/or the ability to deliver products to consumers could be disrupted by labor issues, public health issues, natural or man-made disasters, adverse effects of climate change, financial distress, production difficulties, capacity limitations, or other factors;
- Failure to develop and deploy secure digital services that appeal to customers could have a negative impact on Ford’s business;
- Ford’s ability to maintain a competitive cost structure could be affected by labor or other constraints;
- Ford’s ability to attract, develop, grow, and reward talent is critical to its success and competitiveness;
- Ford’s new and existing products and digital, software, and physical services are subject to market acceptance and face significant competition from existing and new entrants in the automotive and digital and software services industries, and its reputation may be harmed if it is unable to achieve the initiatives it has announced;
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Ford’s results are dependent on sales of larger, more profitable vehicles, particularly in
the United States ; - With a global footprint and supply chain, Ford’s results and operations could be adversely affected by economic or geopolitical developments, including protectionist trade policies such as tariffs, or other events;
- Industry sales volume can be volatile and could decline if there is a financial crisis, recession, public health emergency, or significant geopolitical event;
- Ford may face increased price competition or a reduction in demand for its products resulting from industry excess capacity, currency fluctuations, competitive actions, or other factors, particularly for electric vehicles;
- Inflationary pressure and fluctuations in commodity and energy prices, foreign currency exchange rates, interest rates, and market value of Ford or Ford Credit’s investments, including marketable securities, can have a significant effect on results;
- Ford and Ford Credit’s access to debt, securitization, or derivative markets around the world at competitive rates or in sufficient amounts could be affected by credit rating downgrades, market volatility, market disruption, regulatory requirements, or other factors;
- The impact of government incentives on Ford’s business could be significant, and Ford’s receipt of government incentives could be subject to reduction, termination, or clawback;
- Ford Credit could experience higher-than-expected credit losses, lower-than-anticipated residual values, or higher-than-expected return volumes for leased vehicles;
- Economic and demographic experience for pension and OPEB plans (e.g., discount rates or investment returns) could be worse than Ford has assumed;
- Pension and other postretirement liabilities could adversely affect Ford’s liquidity and financial condition;
- Ford and Ford Credit could experience unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, services, perceived environmental impacts, or otherwise;
- Ford may need to substantially modify its product plans and facilities to comply with safety, emissions, fuel economy, autonomous driving technology, environmental, and other regulations;
- Ford and Ford Credit could be affected by the continued development of more stringent privacy, data use, data protection, and artificial intelligence laws and regulations as well as consumers’ heightened expectations to safeguard their personal information; and
- Ford Credit could be subject to new or increased credit regulations, consumer protection regulations, or other regulations.
We cannot be certain that any expectation, forecast, or assumption made in preparing forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events, or otherwise. For additional discussion, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
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Source: Ford Motor Company
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