Ford Motor Company posted Q2 results that saw sales drop to 645,000 or -53% because of COVID-related lower industry volume and suspended production through May 17. Adjusted Earnings Before Interest and Taxes was down -$1.9B, because of lower volume, new-model material cost and warranty, offset partially by higher net pricing, and lower structural cost arising from suspended production, reduced marketing activity and other one-time cost actions.
Analysts, a mysterious species to AutoInformed, were surprised and delighted? AutoInformed noted an ongoing warranty cost disaster, which is a management failure not a Covid issue. It remains troubling as Ford is introducing increasingly complex but profitable SUV, EVs and Trucks.
Here’s the Snapshot:
- Q2 wholesale units down 53%, reflecting chiefly COVID-related lower industry volume and suspended production for most of the quarter.
- Revenue at $19.4B dropped -50%, driven by lower volume and weaker currencies, offset partially by higher net pricing.
- EBIT fell only -10% at -1.9B, despite a significant wholesale reduction; higher net pricing, cost performance and favorable vehicle mix more than offset inflationary cost increases.
- The automotive results dropped in all regions – except for China and South America which broke even.
- Ford made a gain of $3.5B in its Argo Autonomous vehicle subsidiary.