Visitor walk past a Ford Escape Titanium at the Shanghai Auto Show in Shanghai on April 17, 2019.
Greg Baker| AFP | Getty Images
DETROIT – Ford Motor plans to invest $29 billion in electric and autonomous vehicles through 2025, the company announced Thursday when it reported better-than-expected fourth-quarter earnings.
Wall Street was waiting to see Ford pour more money into the emerging technologies after General Motors announced plans last year to up spending on all-electric and autonomous vehicles to $27 billion between 2020 and 2025.
Ford said its plans include $7 billion in self-driving vehicles and $22 billion in electrified vehicles, up from $11.5 billion through 2022. The company also is including previous investments of roughly $7 billion since 2016 in the new amount.
Ford said a majority of vehicles under the plan will be all-electric, but the company also has hybrid and plug-in hybrid models that continue to have traditional internal combustion engines.
The company’s earnings were mixed. Here’s how Ford did compared with what Wall Street expected based on average estimates compiled by Refinitiv.
- Adjusted EPS: 34 cents versus an expected loss of 7 cents
- Revenue: $33.2 billion versus $33.89 billion, expected
Shares of Ford jumped by as much as 4% during afterhours trading Thursday before leveling off to about $11.40, up less than 1%.
2021 outlook
For 2021, CFO John Lawler said the company estimates it will earn between $8 billion and $9 billion in adjusted pre-tax profits and generate between $3.5 billion and $4.5 billion in adjusted free cash flow. That doesn’t factor in a global shortage in semiconductor chips that he said could lower Ford’s earnings by $1 billion to $2.5 billion this year.
“The semiconductor situation is changing constantly, so it’s premature to try to size what
availability will mean for our full-year performance,” he said in a press release. “Right now, estimates from suppliers could suggest losing 10% to 20% of our planned first-quarter production.”
Ford earlier Thursday said it was significantly cutting production at plants next week in Michigan and Missouri that produce its profitable F-150 pickup trucks due to a global semiconductor chip shortage.
Automakers and parts suppliers began warning of a semiconductor shortage late last year after demand for vehicles rebounded stronger than expected following a two-month shutdown of production plants due to the coronavirus pandemic.
Fourth quarter earnings
On an unadjusted basis, Ford’s loss widened to $2.79 billion, or a loss of 70 cents a share, during the fourth quarter from a loss of $1.67 billion, or a loss of 42 cents a share, during the same three months of 2019.
Ford excluded more than $5 billion in special charges from its adjusted earnings for the quarter. They included $2.4 billion to end manufacturing in Brazil as part of a restructuring of its South American operations and $610 million to recall 3 million older vehicles due to potential issues with their airbag inflators. Other charges involved pension obligations and other restructuring actions.
Ford’s results in the fourth quarter were led by its operations in North America, which made $1.1 billion on revenue of $22 billion. All other segments aside for Europe with earnings of $414 million lost money for the automaker. That included a $105 million loss in South America and $66 million loss in China.
